Wall Street tension heats Israel
Photo: AP
Israel tense over TASE reopening
Tel Aviv Stock Exchange must make up for Yom Kippur recess, during which global trade saw one of its worst weeks in history; finance minister urges public to remain calm
Israeli investors and policy-makers are tensely awaiting the reopening of the TASE, and their concern is not unfounded. Stock exchanges worldwide have emerged from one of their darkest weeks in history, with huge drops occurring in the Asian market sparking a domino effect that took the European market with it.
Once it returns from its Yom Kippur recess after the weekend, the TASE will have to compensate for a 15% deficit in trading.
Thanks to Fischer
Calcalist
Unexpected decision by Bank of Israel to lower interest rate by 0.5% propelled stock rates – Real Estate Index up by 19%, TA-25 gains 3.9%
Finance Minister Ronni Bar-On attempted to calm the Israeli public on Friday during an interview with Channel 1. "The public should feel secure and not panic," he told the news anchor.
Bar-On was in good company as he followed in the footsteps of US President George W. Bush, who said Friday that his government's rescue program was aggressive enough and big enough to work. "We can solve this crisis and we will," he pledged.
Bush's words seemed to echo in a void, however, as fears that banking systems had essentially frozen up sent worried investors rushing for the exits. The Dow Jones industrial average just completed its worst week in history and has plunged by nearly 2,400 points over the past eight trading sessions.
In the midst of all that carnage, the G-7 countries — the United States, Japan, Germany, France, Britain, Italy and Canada — sought to strike a determined tone to do what they could to combat the problem in their countries.
The Israeli market, after suffering through one of its blackest days in history on Sunday and plunging even further on Monday, experienced a slight resuscitation on Tuesday thanks to a surprising move by the governor of the bank of Israel, Stanley Fischer, who cut interest rates after the market had nose-dived by 6% in three days.
The TASE still has a lot of ground to cover however, as Wall Street's 5% plunge on Tuesday night was recorded just as the country slid into Yom Kippur mode. Throughout the holiday the gap between Israel and the world has widened, causing great concern over the renewal of trade after the weekend.
AP contributed to this report
