Tel Aviv Stock Exchange slides amid fears over the coronavirus outbreak
European shares also slumped across the board on Monday.
By EYTAN HALON, REUTERSA man stands in front of an electronic board displaying market data at the Tel Aviv Stock Exchange, in Tel Aviv, Israel(photo credit: REUTERS/BAZ RATNER)
The opening of the Tel Aviv Stock Exchange was delayed on Monday morning for over half an hour as stocks continued their sharp decline amid fears over the novel coronavirus outbreak.The exchange’s “circuit breaker” mechanism was activated due to volatility in the market exceeding 5%. At closing, stocks on the exchange’s flagship TA-35 index slumped by 6.53% and the TA-125 index dropped by 6.63%.The slump continued negative trends experienced since trading commenced this week, with the TA-35 dropping by 4.78% on Sunday as it mirrored severe declines recorded across international markets.As oil prices crashed on Monday, due to the impact of the coronavirus and a price war between Russia and Saudi Arabia, Israeli energy companies registered the greatest losses. Shares in Delek Group dropped by 24.1% after dropping by 30.8% on Sunday.One notable gainer was Opko Health, which climbed 4.38% on Monday after announcing last week that its BioReference Laboratories subsidiary would provide a diagnostic test for the novel coronavirus across the US.Ittai Ben-Zeev, the CEO of the Tel Aviv Stock Exchange, said the circuit breaker was activated to “allow investors time to make informed decisions,” and relies on technology to act in the same manner when facing similarly extreme peaks and valleys. The exchange will be closed on Tuesday for the Purim holiday.“Throughout history, the stock exchange has been responding to short-term economic crises – in a similar vein to world markets – which express uncertainty but, in the long run, the stock exchange has demonstrated stability and corrected itself,” said Ben-Zeev.“The Israeli economy and capital market are strong and we believe that the State of Israel and its leaders will act responsibly and with leadership to help the economy overcome this crisis.”US stock markets plummeted on Monday, having sold off in the past two weeks on fears the outbreak would push the global economy into a recession, triggering a brief trading halt on the New York Stock Exchange. The benchmark S&P 500 and the Dow were down more than 7%.US President Donald Trump, who has repeatedly played down the threat posed by the flu-like virus sweeping the globe, was planning to meet with Treasury Secretary Steven Mnuchin and other members of his economic team to weigh possible action, an administration official told Reuters.
US House of Representatives Speaker Nancy Pelosi, the top Democrat in Congress, said the plunge suggested investors lacked confidence in the Trump administration’s coronavirus battle plan.Trump, who often points to the stock market as a gauge of his economic record, criticized news media organizations’ coverage of the outbreak in a tweet and accused Democrats of hyping the situation “far beyond what the facts would warrant.”Trump blamed a fight for oil market share between Saudi Arabia and Russia, as well as unspecified “Fake News,” for a precipitous drop in US stock prices on Monday, amid a sliding demand for crude due to the coronavirus.In a series of tweets, Trump also said the associated plunge in oil prices would benefit Americans: “Good for the consumer, gasoline prices coming down!”In referring to “Fake News,” Trump appeared to be referring to coverage of the coronavirus.The spread of the virus around the world – and a mounting death toll from COVID-19, the disease it causes – has rattled global markets.Throughout his presidency, Trump, who faces reelection in November, has frequently pointed to rising stock prices and record-high market indexes as a signal of the American economy’s health.“Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop,” Trump wrote on Twitter.In a separate tweet, he downplayed the impact of the coronavirus, comparing the number of American lives it has taken to the greater number of deaths from seasonal influenza.“Nothing is shut down, life & the economy go on,” he wrote. “Think about that!”
