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Even before the US operation, the Tel Aviv Stock Exchange (TASE) had been climbing steadily since last week, when Israel began Operation Rising Lion.
By Shula Rosen
The Tel Aviv stock market rose to record levels on Sunday in response to the news of the US attacks on Iran’s nuclear facilities.
The broad Tel Aviv 125 index closed up 1.8%, extending its gains to nearly 8% over the past week, while the blue-chip TA-35 index rose 1.5%.
Even before the US operation, the Tel Aviv Stock Exchange (TASE) had been climbing steadily since last week, when Israel began Operation Rising Lion.
The Tel Aviv 35 Index gained 5% last week, while the Tel Aviv 90 Index rose 7.6%. As of Monday morning, the TA-35 was up another 1.09%.
The market reaction contrasts sharply with expectations following Israel’s recent strikes on Iran. The shekel has also stabilized, with the exchange rate returning to pre-strike levels — reaching approximately 3.48 shekels to the dollar on Friday after briefly rising to around 3.60.
“From every point of view, if I had to describe the US move in two words, I would say ‘game changer’, for the region, for the fate of the Iranian nuclear program, and the regional economy,” said Mizrahi Tefahot Bank chief markets economist Ronen Menachem in an interview with Globes.
The change, he said, “is in the character of the war, making it broader, with the possibility that other countries will become involved.”
Despite the euphoria after the initial attack, during which US President Donald Trump said three key nuclear sites in Iran were “totally obliterated,” Menachem said the public and the markets are now in a waiting mode to see how other countries in the Middle East are going to react to the attack and when and how Iran will retaliate, perhaps also against the US.
“There’s no doubt that in this respect, there’s an improvement in the security environment, and on the other hand, nervousness over the possible reaction from Iran, so that there are layers of uncertainty,” he said.
The reason for the significant upswing was the uncertainty over whether the US would join Israel in the war with Iran. This doubt was eliminated when the US began its operation, causing the markets to rise.
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