Israeli Markets Rally as Investors Sketch Post-Iran Conflict Landscape
Reuters
Part of an electronic board displaying market data is seen at the Tel Aviv Stock Exchange, in Tel Aviv, Israel November 4, 2020. Picture taken November 4, 2020.
JERUSALEM/LONDON, June 16 (Reuters) – Israel's shekel jumped sharply and stocks and bonds gained on Monday as investors began to look beyond the escalating conflict with Iran and shape a more favorable long-term risk assessment for the country's assets.
The shekel ILS= traded at 3.50 to the dollar by 1642 GMT, 3.6% stronger on the day and scoring its best performance since October 9, 2023, when the central bank heavily intervened to shore up the currency following the outbreak of the Gaza war.
The Israeli currency had rallied as much as 4.6% earlier in the session, snapping a four-day losing streak and clawing back hefty losses suffered last week when rumors of an Israeli attack on Iran intensified. Israel launched its biggest-ever military strike against its longstanding enemy early on Friday.
The main Israeli share indices also gained, with the broad Tel Aviv 125 index .TA125 closing 2.6% higher and extending Sunday's gains of some 0.5%. The rise followed a weekend of punishing Israeli attacks on Iranian nuclear facilities, ballistic missile factories and military commanders, which were met with retaliatory Iranian strikes against Israel.
'The reaction of the local markets … perhaps reflects the assessment that in certain scenarios this war may be a catalyst for a new status quo in the region,' said Bank Hapoalim chief economist Victor Bahar.
Israeli officials have said the conflict will take time and will not end until the Iranian nuclear threat is removed. Tehran denies it wants to build nuclear weapons.
Middle East tensions have been rising since the war in Gaza erupted 20 months ago after Hamas-led and Iranian-backed militants stormed into southern Israel and took 251 hostages and killed 1,200 people, most of them civilians.
Israel's military campaign since has killed nearly 55,000 Palestinians, most of them civilians, according to health authorities in Gaza.
Fighting between Israel and Tehran's proxies such as Hezbollah in Lebanon and the Houthis in Yemen has also intensified.
'Most of these (proxies) have been destroyed or weakened, but Iran's nuclear weapon program has remained a long-term existential threat for Israel,' said Leader Capital Markets chief economist Jonathan Katz.
'Delaying this program significantly – and maybe a credible commitment from Iran to forgo high-level nuclear enrichment – will reduce Israel's geopolitical risk premium markedly.'
Israel's international bonds as well as its credit default swaps – a proxy for insurance against risk of default – both regained ground on Monday.
The 2120 maturity added more than 1.5 cents to bid at 67.07 cents on the dollar, Tradeweb data showed, around 1 cent below levels seen last Wednesday when reports of a potential imminent attack emerged. Israel's five-year credit default swap also dropped sharply to 108 basis points from Friday's close of 122 bps.
At a domestic bond auction on Monday, Israel sold 2.75 billion shekel ($785 million) of various debt maturities in a sale that was multiple times oversubscribed.
Israel's economic performance and the macroeconomic pressures it faces have been choppy in recent years.
Data on Sunday showed the inflation rate eased more than expected to 3.1%, though the central bank is expected to remain cautious. The derivatives market is pricing in an interest rate cut in mid-2026.
Earlier on Monday, first-quarter economic growth was revised up to an annualized 3.7% from 3.4%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asahi Shimbun
an hour ago
- Asahi Shimbun
VOX POPULI: Trump trashes American values championed in Statue of Liberty
A demonstrator dressed like the Statue of Liberty holds a placard during a No Kings Day protest against President Donald Trump's policies, outside City Hall, in downtown Los Angeles, California, on June 14. (REUTERS/MIKE BLAKE) The sky was said to be overcast on June 17, 1885, when a ship arrived in New York Harbor. On board was the Statue of Liberty—a gift from France, disassembled and packed in 214 crates for shipment across the Atlantic. The assembled statue holds the Declaration of Independence in its left hand and a torch in its right. A bronze plaque inside the statue's pedestal is inscribed with a poem, including these famous lines: 'Give me your tired, your poor,/ Your huddled masses yearning to breathe free,/ The wretched refuse of your teeming shore.' The words reflect the founding spirit of the United States of America—a new world whose doors are wide open and where everyone is given a chance. Donald Trump's presidency embodies the ultimate antithesis of that. His administration forcibly seizes immigrants, send troops against protesters and contrives to block foreign students from studying at Harvard University. I can only say that Trump has trashed America's founding spirit. The nationwide 'No Kings' anti-Trump rallies held over the weekend were the largest-scale protests since the start of his second presidency. Internationally, the rallies were also known as 'No Dictators' or 'No Tyrants' protests. Who could have imagined such demonstrations being held in the United States, of all places—not in some emerging nation or dictatorship. America had its declaration of independence, and then the Civil War, before it got to where it is today. We tend to think that society inevitably changes in the direction of freedom and democracy. But if we don't speak out, society can fall apart all too readily. The United States may be at a critical crossroads today. The Statue of Liberty faces the sea, as if to illuminate the world with its torch. I want to make it turn around and see what is going on behind it. —The Asahi Shimbun, June 17 * * * Vox Populi, Vox Dei is a popular daily column that takes up a wide range of topics, including culture, arts and social trends and developments. Written by veteran Asahi Shimbun writers, the column provides useful perspectives on and insights into contemporary Japan and its culture.
The Mainichi
an hour ago
- The Mainichi
Israel orders 300,000 people in Tehran to evacuate while Trump issues ominous warning
TEL AVIV, Israel (AP) -- Israel warned hundreds of thousands of people to evacuate the middle of Iran's capital as Israel's air campaign on Tehran appeared to broaden on the fourth day of an intensifying conflict. An Iranian television anchor fled her studio during a live broadcast as bombs fell on the headquarters of the country's state-run TV station. U.S. President Donald Trump posted an ominous message on his social media site later Monday calling for the immediate evacuation of Tehran. "IRAN CAN NOT HAVE A NUCLEAR WEAPON," Trump wrote, adding that "Everyone should immediately evacuate Tehran!" White House press secretary Karoline Leavitt said on social media shortly after Trump's post that he was returning from the G7 summit in Canada a day early due to the intensifying conflict between. Israel says strikes have set back nuclear program Prime Minister Benjamin Netanyahu said the Israeli strikes have set Iran's nuclear program back a "very, very long time," and told reporters he is in daily touch with Trump. "The regime is very weak," he added. Israel says its sweeping assault on Iran's top military leaders, uranium enrichment sites and nuclear scientists, is necessary to prevent its longtime adversary from getting any closer to building an atomic weapon. The strikes have killed at least 224 people since Friday. Iran maintains that its nuclear program is peaceful, and the U.S. and others have assessed that Tehran has not had an organized effort to pursue a nuclear weapon since 2003. The head of the International Atomic Energy Agency has repeatedly warned that the country has enough enriched uranium to make several nuclear bombs should it choose to do so. Iran has retaliated by launching more than 370 missiles and hundreds of drones at Israel. So far, 24 people have been killed in Israel and more than 500 injured. The back-and-forth has raised concerns about all-out war between the countries and propelled the region, already on edge, into even greater upheaval. Israel's military issues evacuation warning affecting up to 330,000 people Earlier Monday, Israel's military issued an evacuation warning to 330,000 people in a part of central Tehran that houses the country's state TV and police headquarters, as well as three large hospitals, including one owned by Iran's paramilitary Revolutionary Guard. The city, one of the region's largest, is home to around 9.5 million people. Israel's military has issued similar evacuation warnings for civilians in parts of Gaza and Lebanon ahead of strikes. State-run television abruptly stopped a live broadcast after the station was hit, according to Iran's state-run news agency. While on the air, an Iranian state television reporter said the studio was filling with dust after "the sound of aggression against the homeland." Suddenly, an explosion occurred, cutting the screen behind her as she hurried off camera. The broadcast quickly switched to prerecorded programs. The station later said its building was hit by four bombs. An anchor said on air that a few colleagues had been hurt, but their families should not be worried. The network said its live programs were transferred to another studio. Israel claims 'full aerial superiority' over Tehran Israeli military spokesperson Brig. Gen. Effie Defrin said Monday that his country's forces had "achieved full aerial superiority over Tehran's skies." The military said it destroyed more than 120 surface-to-surface missile launchers in central Iran, a third of Iran's total, as well as two F-14 planes that Iran used to target Israeli aircraft and multiple launchers just before they launched ballistic missiles towards Israel. Israeli military officials also said fighter jets had struck 10 command centers in Tehran belonging to Iran's Quds Force, an elite arm of its Revolutionary Guard that conducts military and intelligence operations outside Iran. The Israeli strikes "amount to a deep and comprehensive blow to the Iranian threat," Defrin said. One missile fell near the American consulate in Tel Aviv, with its blast waves causing minor damage, U.S. Ambassador Mike Huckabee said on X. He added that no American personnel were injured. Explosions rock Tel Aviv, Petah Tikva and Haifa oil refinery Powerful explosions rocked Tel Aviv shortly before dawn Monday, sending plumes of black smoke into the sky over the coastal city. Authorities in the central Israeli city of Petah Tikva said Iranian missiles hit a residential building there, charring concrete walls, shattering windows and ripping the walls off multiple apartments. Iranian missiles also hit an oil refinery in the northern city of Haifa for the second night in a row. The early morning strike killed three workers, ignited a significant fire and damaged a building, Israel's fire and rescue services said. The workers were sheltering in the building's safe room when the impact caused a stairwell to collapse, trapping them inside. Firefighters rushed to extinguish the fire and rescue them, but the three died before rescuers could reach them. No sign of conflict letting up Iran's foreign minister, Abbas Araghchi, appeared to make a veiled outreach Monday for the U.S. to step in and negotiate an end to hostilities between Israel and Iran. In a post on X, Araghchi wrote that if Trump is "genuine about diplomacy and interested in stopping this war, next steps are consequential." "It takes one phone call from Washington to muzzle someone like Netanyahu," Iran's top diplomat wrote. "That may pave the way for a return to diplomacy." The message to Washington was sent as the latest talks between the U.S. and Iran were canceled over the weekend after Israel targeted key military and political officials in Tehran. On Sunday, Araghchi said that Iran will stop its strikes if Israel does the same. The conflict has also forced most countries in the Middle East to close their airspace. Dozens of airports have stopped all flights or severely reduced operations, leaving tens of thousands of passengers stranded and others unable to flee the conflict or travel home. Health authorities reported that 1,277 people were wounded in Iran. Iranians also reported fuel rationing. Rights groups such as the Washington-based Iranian advocacy group Human Rights Activists have suggested that the Iranian government's death toll is a significant undercount. The group says it has documented more than 400 people killed, among them 197 civilians. Ahead of Israel's initial attack, its Mossad spy agency positioned explosive drones and precision weapons inside Iran. Since then, Iran has reportedly detained several people and hanged one on suspicion of espionage.
an hour ago
U.S. Urged to Withdraw High Tariff Measures at G-7 Summit
Kananaskis, Canada, June 16 (Jiji Press)--The United States on Monday faced calls for withdrawing at an early date the high tariff policy introduced by the administration of President Donald Trump, at a two-day Group of Seven summit that started the same day in Kananaskis, western Canada. Trump is poised to return home later in the day, without attending the second-day session of the summit among the seven major countries, citing a need to deal with escalating tensions in the Middle East. On the first day, participants, apparently with the high U.S. tariffs in mind, exchanged opinions on maintaining and boosting the multilateral free trade system as part of their discussions on the global economy, according to the Japanese Foreign Ministry. The G-7 leaders shared the view that they, through candid discussions, need to spearhead the world's efforts to tackle a host of challenges. Japanese Prime Minister Shigeru Ishiba stressed that the G-7 countries--Britain, Canada, France, Germany, Italy, Japan and the United States--should unite and lead the international community to build a rules-based free and fair economic order. Over the Middle East, the leaders discussed measures to prevent a full-scale military clash between Israel and Iran and adopted a joint statement, which said, "We urge that the resolution of the Iranian crisis leads to a broader de-escalation of hostilities in the Middle East, including a ceasefire in Gaza." [Copyright The Jiji Press, Ltd.]
