There was enormous tension on the Tel Aviv Stock Exchange this morning, the first market to open worldwide after S&P announced that it was downgrading the US credit rating from AAA to AA+. The TASE was expected to fall sharply not only because of the downgrading but also because of losses on global markets on Friday, when the Israeli market was closed. Opening of trading was delayed until 10.45 am with the Tel Aviv 25 Index down 6% in pre-market trading. Shortly after trading began, the Tel Aviv 25 Index was down 4.8% at 1099.67 points and by the afternoon the losses had increased with the Tel Aviv 25 Index down 6.33% to 1081.82 points.
Last week the TASE had its worst week since 2008 with the Tel Aviv 25 Index losing 6.3%. This morning's falls were the Israeli markets eighth straight day of losses.
Excellence Nessuah chief economist Shlomo Maoz said, "There will be sharp falls but the tsunami is behind us. Anybody who sells shares in panic will be sorry."
Minister of Finance Yuval Steinitz reportedly consulted with economic experts last night and decided to close the stock exchange should the falls reach panic proportions.
Against the backdrop of the crisis, the shekel continues to weaken. On Friday the shekel dollar exchange rate was set up 0.89% at NIS 3.52/$ and the euro was set up 0.11% at NIS 4.979/€.
The shekel continued to weaken today in options trading. The shekel dollar exchange rate was up 0.5% in options trading this morning at NIS 3.538/$, and the shekel euro exchange rate was up 0.58% at NIS 5.008/€.
Published by Globes, Israel business news - www.globes-online.com - on August 7, 2011
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