Israeli Stocks Drop After Sudden Election Announcement in April 2019

In morning, Israeli shares found support in some company owners who utilized the Sunday rout to pick up their own stock on the downswing

Mixed market, illustration
ALY SONG/ REUTERS

Tel Aviv stocks turned direction and dropped Monday, with all indices ending in the red after after the coalition leaders announced that elections will be held ahead of time, on April 9.

Israeli shares had been mixed with a negative bias in early afternoon following a 5% drop by Israeli large-caps the day before, and the announcement seems to have spooked local investors, with the decline picking up momentum in late trading. The large-cap index TA-35 and broader TA-135 both fell 2.1% to 1419 points and 1288 points respectively. The smallcap SME-60 index fell by 1.8% to end at 522 points and the Banks index lost 3.4%. Migdal Insurance lost 6.6% after its chairman, Oded Sarig, announced his resignation.

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The bond indices fell by 0.3% Monday, after losing 1.2% on Sunday.

Through much of the day, stocks had some negative bias. Several company owners had taken advantage of Sunday's downturn to pick up stock on the cheap. One such for instance was the controlling shareholder of the real estate company Emilia, which dropped by 5% Sunday on turnover of 5.8 million shekels. So it turns out that Oded Feller had bought all Emilia shares on offer.

Igal Dimri, controlling shareholder of the construction company Dimri, bought half a million shekels' worth of his company's stock on the market Sunday, increasing his stake to 67.07%; Hanan Mor, owner of the Mor construction group, also bought half a million shekels' worth of his company's stock.

Teva lost earlier gains to end down 1.2%, following its 8% tumble on Sunday. Fellow drugs company Perrigo ended 1.3% lower Monday after losing 29% the day before.

Israeli stocks sank hard Sunday after Wall Street closed the week with sharp drops.

What the week will bring is anybody's guess, but Zack's "ahead of Wall Street" pointed out Friday that even given the slight uptick in futures, the market is on track to its worst December in 87 years, "back when Charlie Chaplin was charming movie audiences." That's no laughing matter.