Israeli Stocks Drop Amid Fears of U.S. Attack on Syria

The Tel Aviv Stock Exchange experienced declines at the commencement of trading on Tuesday following U.S. Secretary of State John Kerry's remarks Monday evening presaging American military intervention in Syria.

• Kerry: Syria Chemical Attack Undeniable
• Kerry: Syria Chemical Attack Undeniable
• U.S. Accuses Assad of Using Chemical Weapons
• Syria: Kerry Lying About Gas Attack
• Hagel: US Could Strike Syria Now

Both the TA-25 and TA-100 stock indices comprised of Israel's largest publicly traded companies fell 0.9% at the start of trading. The exchange indices for fossil fuel companies and real estate, TA-Oil & Gas and TA Real Estate-15 fell 1.9% and 1.3%, respectively. The drop in the bond market was much smaller with the top bond indices, Tel-Bond 20, Tel-Bond 40 and Tel-Bond 60, falling just 0.16% at the start of trading.

At the close of trading on Monday, the Bank of Israel's Monetary Committee, led by Acting Governor Karnit Flug, decided to leave the interest rate for September unchanged at 1.25%, a decision expected by the markets. The central bank announced that it was also switching back to discussing interest rate changes every month in light of the uncertainty in global markets. Consequently, the current interest decision will be revisited after one month, ahead of October, instead of two months as originally planned.

The market is also waiting tensely to receive Banks Supervisor David Zaken's guidelines to limit bank executives' salaries, which are expected to be published in the coming days. The new guidelines are expected to limit the a variable compensation component of bank executives' salaries, such as stock options and annual bonuses, to 100% of their fixed salary.