Ministers urge gov't to ensure Israeli market's stability

Interior Minister and Kadima chairmanship hopeful Meir Sheetrit said Tuesday that the latest financial crisis on Wall Street "is bound to have some effect on the Israeli economy.

"The government must take the appropriate action to ensure the Israeli market's stability, in order to prevent hysteria," he added.

Sheetrit, who served in a senior advisory position in the Finance Ministry in 2003, said he believed the Treasury must confer with the Histadrut labor federation and the captains of industry in order to minimize the impact on the Israeli economy.

Defense Minister Ehud Barak also addressed the financial crisis on Tuesday, saying that "a financial tsunami is nearing and Israel may face recession."

The government, he reiterated Sheetrit's sentiments, must be prepared, and act in advance to make sure the local market remains balanced.

Financial earthquake

American holdings giant Lehman Brothers' sent shockwaves through Wall Street on Monday, when it announced it was filing for bankruptcy. Wall Street subsequently lost a staggering $500 billion in trading.

The European, Asian and Israeli markets all noted a considerable slump: The Tel Aviv Stock Exchange traded down, as TA-25 lost 3.5% (888.93 points), TA-100 fell 4.35% (803.47 points), the Tel-Tech dropped 5% (210.56) and TA-Real Estate lost 5.94%, hitting 282.07 points.

Dollar rates dropped 1.18%, as it traded at NIS 3.547. The euro fell 1.35% traded at NIS 5.034.

In the European arena, the British FTSE lost 2.75, France's CAC-40 fell 1.45% and the German DAX fell 1.68%.

The Asian markets noted sharp losses as well, as Japan's Nikkei lost 5.26%, Hong Kong's Hang Seng fell 5.9%, the Indian Stock Exchange lost 1.94%, and the Seoul Stock Exchange plummeted by 6.48%.

Tomer Korenfeld and Anat Tzipkin contributed to this report