Israeli assets fell across the board after the country's tight election appeared to point to a stalemate, with no party having a clear path toward forming a government. The shekel depreciated about 1% against the dollar, its biggest intraday loss in two weeks and one of the worst currency losses globally on Wednesday.
The benchmark stock index in Tel Aviv was down 2.7%, heading for its biggest decline since June. Bank Hapoalim BN fell about 4%, and Phoenix Financial Ltd. slumped more than 5%.
Prime Minister Benjamin Netanyahu was edging past opposition leader Gadi Eisenkot with only half the votes counted, though both expressed confidence they would be the next leader. The makeup of any new government may take weeks to finalize. Piotr Matys, senior foreign-exchange analyst at ITC Markets, said the move in the shekel "implies that the market is disappointed that the Eisenkot-led bloc was not able to deliver a decisive blow to the pro-Netanyahu bloc," adding that "Israel could be facing a period of tense political bickering."
Israel's dollar bonds also underperformed emerging-market and regional peers. The yield on $2 billion in bonds with January 2036 maturity rose to 5.9%, halting a week of decreases, according to data compiled by Bloomberg.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing