Shares on the Tel Aviv Stock Exchange tumbled Sunday as the market braced for the worst after negotiations between Greece and its creditors broke down over the weekend.
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In what might turn out to be a taste of a global rout Monday, when most of the world’s stock markets open for the week, the benchmark TA-25 index ended down 1.8% at 1,641.52 points, while the TA-100 lost 1.9% to 1,415.15. Turnover was higher than usual for a Sunday at 844.8 million shekels ($222.8 million).
Exchange traded notes (teudot sal) tracking European indexes were especially hard hit, with declines of up to 4.5%. In the fixed-income market, the Tel Bond 20, 40 and 60 indexes were down by as much as 0.88%, although government shekel bonds posted a small advance.
Greece said it would close its banks and impose capital controls as of Monday after creditors refused to extend the country’s bailout and savers lined up to withdraw cash, taking Athens’ standoff with the European Union and the International Monetary Fund to a dangerous level.
Greece’s banks, kept afloat by emergency funding from the European Central Bank, are on the front line as Athens moves toward defaulting on a 1.6-billion-euro ($1.8 billion) payment due the IMF on Tuesday.
“There’s still a chance for a solution to the crisis in one of two ways. Either the IMF agrees to delay repayment of Greece’s loan due Tuesday, or in the end a compromise of some sort is reached between the Greek government and the euro zone,” said Dudi Reznik of Leumi Capital Markets. “In any case, tomorrow, when world markets open, these developments will have a strong impact — mainly on the forex and bond markets in the euro zone, but also on the stock market.”
David Katash, CEO of Tamir Fishman Mutual Funds, said the impact of a Greek exit from the euro zone would be short-term, except for Greece.
“We have three fateful days ahead of us during which things could change and maybe the market will resume its optimism,” he said. “The impact of a Greek exit from the [euro] zone will be bad in the short run, but looking at it longer term the impact on European markets will shrink over time.”
Energy shares were also pounded as tensions grew over delays on the government’s decision on how to treat the natural gas cartel. The oil and gas index dropped 3.3%, with Avner down 2.4% to 3.12 shekels, Delek Drilling off 3.4% to 16.77 and Isramco losing 3% to 7.76. Delek Group, which controls Delek Drilling and Avner, lost 2.9% to 1,155 shekels.
But the market was down sharply all around, with only four shares in the TA-100 posting gains for the day. Opko Health rose 3.2% to 59.55 shekels after the U.S. National Comprehensive Cancer Network said it would include the company’s 4Kscore as a recommended test for early prostate cancer. Partner Communications rose 1.2% to 10.48 shekels.
Other big losers were bank shares, with Hapoalim sliding 3.2% to 20.25 shekels and Leumi down 3.7% to 15.80. Dual-listed shares were also down sharply — Ezchip was off 5.6% to 60.36 shekels, TowerJazz 5.3% to 58.71 and LivePerson 4.5% to 36.95.