Israeli assets plunge as years of war-related gains evaporate amid expectations of peace talks

Glonghui, June 23 — This month, the Israeli stock market and currency have become the world’s worst-performing assets. The Israeli benchmark index TA-35 has plunged by more than 12% in US dollar terms this month, marking the largest decline among major global stock indices. In percentage terms, June’s sell-off is set to be the worst month since October 2023, when Hamas launched attacks against Israel, sparking the devastating war in Gaza. Ironically, the nearly three-year-long, intense regional conflict had previously led to a sharp rise in Israeli assets, as investors bet on Israel achieving a more secure situation, thus driving economic growth. From November 2023 to early this month, the shekel appreciated 42% against the US dollar, making it the best-performing currency globally. The Israeli stock market nearly quadrupled, outpacing South Korea’s KOSPI Index, ranking second worldwide only to Ghana. However, these gains are now narrowing. Since Iran began negotiations with the US, the Israeli shekel has fallen back by about 5% against the US dollar so far in June, the biggest decline among all global currencies. Hapoalim Bank, one of Israel’s largest banks, stated that the agreement being reached between the US and Iran is seen by local investors as failing to improve Israel’s long-term security outlook. More notably, it falls far short of the high expectations formed during the early stages of military action against Iran.