Israel Markets Eye 3% Shekel Swing on Election as Some Investors Favor Netanyahu Defeat
Updated
Updated · Reuters · Oct 26
Israel Markets Eye 3% Shekel Swing on Election as Some Investors Favor Netanyahu Defeat
3 articles · Updated · Reuters · Oct 26
Summary
JPMorgan estimates the shekel could move as much as 3% after Tuesday's election, with some investors expecting an opposition win to cut Israel's risk premium and lift local assets.
Opinion polls show neither Benjamin Netanyahu's bloc nor Gadi Eisenkot's alliance reaching the 61 seats needed to govern, raising the risk of prolonged coalition talks or another vote.
Israeli assets still enter the election from a position of strength: the Tel Aviv market has surged 130% since the 2023 Hamas attacks, the shekel is up 25%, and stocks have gained about 12% this year.
That rally has weakened since May, with stocks and the shekel both down about 10% as the AI trade cools, while foreign fund ownership of Israeli equities has fallen to a record-low 19% from 34% in 2023.
Longer term, investors are weighing war costs above $55 billion, debt near 70% of GDP and a 4.5% deficit against a history of Israeli markets recovering quickly from election-driven volatility.