Tel Aviv shares post 5th straight drop on escalation in Gaza, Netanyahu remarks

By Steven Scheer

Tel Aviv shares fell for a fifth straight session on Tuesday, weighed down by Israel's escalation against Hamas in Gaza and day-old comments from Prime Minister Benjamin Netanyahu that Israel was facing isolation.

Prices bounced off session lows after Netanyahu made more upbeat remarks on Tuesday. After falling more than 2% early in the session, the blue-chip Tel Aviv 35 index TA35 closed down 0.1% and the broader TA-125 TA125 ended 0.3% lower.

Indices had hit all-time highs last week.

Stocks began to slide on Monday afternoon, after Netanyahu warned of economic sanctions and global isolation arising from negative publicity abroad over the nearly two-year Gaza war.

Israel needed to become a "Super-Sparta", he said, referring to the ancient Greek city known for self-sufficiency and militarism.

He said Israel should reduce the dependence of its industries on trade with other countries and produce more weapons and other goods - not just excel in research and development. He noted that this contrasts with more than two decades of Israel being a free market that has fuelled strong economic growth.

On Monday, Netanyahu also made comments meant to calm the markets. After the early decline on Tuesday, he held another press conference, calling the Israeli economy "resilient" and that he had "terrific confidence in it."

He reiterated that Israel would boost investments in weapons production. On Monday, he said this would help the country reduce dependency on "weak Western European leaders who surrender to the radical Islamic minorities in their countries."

Leader Capital Markets Chief Economist Jonathan Katz said Israel launching a new ground offensive in Gaza City was also hurting the market since there was no sign of a ceasefire.

The shekel USDILS was 0.2% stronger versus the dollar, gaining 8% so far in 2025.