The main Tel Aviv share indices fell by more than 2% on Monday after Prime Minister Benjamin Netanyahu announced a snap election to be held April 9, seeking a fresh political mandate that may help him weather possible charges in corruption investigations.
The Tel Aviv 35 Index fell 2.06% to 1,419.50 points, the Tel Aviv 125 Index dropped by 2.07% to 1,287.62 points, the BlueTech Global Index fell 1.72% to 312.60 points and the TelBond 20 corporate bond index slipped by 0.30% to 334.31 points. Monday's overall trading turnover came to NIS 1.9 billion ($504 million).
Meanwhile, the global market slump following U.S. President Donald Trump's surprise decision last week to pull American troops from Syria has wiped out billions of Israel's foreign currency reserves.
According to the financial daily Globes, the Bank of Israel, which holds 19% of its $115 billion foreign exchange portfolio in shares and corporate bonds, has suffered heavy losses and as a result is expected to report a $2 billion loss on its foreign currency portfolio in 2018.
The central bank's forex portfolio is invested overseas in the capital markets of the U.S., Japan, Germany, France, South Korea, and Hong Kong.
Chief Economist at the Israeli IBI Investment House Rafael Gozlan said Monday that an upcoming election is not much of a surprise, but the timing, amid sell-offs in global markets, adds to uncertainty to which markets do not respond well.
Differences within Netanyahu's coalition over a new military conscription bill affecting exemptions for ultra-Orthodox Jews were given as the main reason for the early ballot.
But there has long been speculation that Netanyahu, whose popularity has held up despite corruption allegations, might call an election before the attorney general decides whether to follow police recommendations to indict him.
An election was due in November in any event.
Opposition lawmakers said they were happy with the announcement of an early election, saying they were sure these would bring a replacement to the Netanyahu-led government.
Netanyahu has served four terms as prime minister: first from 1996 to 1999, then consecutively in 2009, 2013 and 2015. He has been prime minister since March 2009. A fifth election win would give him the most victories in Israeli history.
