© Reuters. A building is on fire following rocket attacks from the Gaza Strip, in Tel Aviv, Israel, October 7, 2023. REUTERS/Itai Ron
By Steven Scheer
JERUSALEM (Reuters) – Israeli stock and bond prices fell and many businesses closed on Sunday, a day after Hamas gunmen from Gaza killed hundreds of Israelis and kidnapped an unknown number of others.
Tel Aviv’s main stock indexes fell as much as 7% and government bond prices fell as much as 3% in the initial market response to the bloodiest attack on Israel in decades.
Although the currency market is closed on Sundays, the shekel is already at its weakest level of the year due to a highly controversial government plan to reform the judiciary.
“This round of violence is expected to be longer and more severe than previous ones, and will clearly have a more negative impact on the economy and fiscal budget,” said Jonathan Katz, chief economist at Leader Capital Markets.
“The shekel will most likely weaken sharply tomorrow and we see a high probability that at some point the Bank of Israel will sell foreign currency.”
Gunmen from the Palestinian group Hamas rampaged through Israeli cities on Saturday, killing at least 400 Israelis, before kidnapping dozens of hostages and returning to Gaza.
Israel has responded with airstrikes against Hamas targets in Gaza.
Gaza militants also fired thousands of rockets into Israel, some of which reached as far as Tel Aviv, prompting airlines to suspend flights to and from Israel.
Finance Minister Bezalel Smotrich said he had ordered the heads of ministerial departments to quickly provide the budgets needed for war management.
INTERRUPTIONS IN AIR TRAVEL
Delta Air Lines (NYSE:) said flights from Israel to New York and Atlanta were canceled through Monday, while United Airlines said “future operations at TLV (airport) will be suspended until conditions allow them to resume.” . Air India said flights to and from Tel Aviv would be suspended until October 14.
Arkia, United Airlines’ smaller rival, said it was operating rescue flights from Athens to bring back Israelis who had been on vacation.
Another rival, Israir, said it was operating rescue flights from Larnaca in Cyprus, but warned it could operate on a reduced schedule in the coming days as the foreign crew of some of its chartered planes have asked to leave Israel.
Nvidia (NASDAQ ), the world’s largest maker of chips used for both artificial intelligence and computer graphics, said it had canceled its ai summit in Tel Aviv next week, where CEO Jensen Huang was scheduled to speak.
Schools were closed and many businesses gave workers the day off, and most stores, except supermarkets and pharmacies, closed.
The Israel Manufacturers Association said factories were continuing to operate despite the state of emergency to ensure there was no fear of a lack of food and other essential products.
“All businesses will continue to operate as much as possible despite difficult emergency conditions, rocket bombardments and the resulting shortage of workers,” said association president Ron Tomer. “Thanks to Israel’s productive independence… even in times of emergency, Israel’s residents will lack for nothing.”
Intel Corp. (NASDAQ:), Israel’s largest employer and exporter, declined to say whether chip production was affected.
“We are closely monitoring the situation in Israel and taking measures to safeguard and support our workers,” a spokesperson said.
Tower Semiconductors (NASDAQ said it was operating as usual.
