Inicio NOTICIAS TASE tumbles after delay in opening

TASE tumbles after delay in opening

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The Tel Aviv Stock Exchange delayed the start of the week’s first session Sunday after pre-opening trade showed the benchmark index dropping more than 6 percent following the downgrading of the United States’ debt rating.

As of 1 p.m., the TA-25 index plummeted by 6% and the TA-100 was down by 6.5%. The Blue Tech 50 plunged 8.75% to reach 325.52 points.
Exchange spokeswoman Idit Yaaron said the start of trade was pushed back by 45 minutes "so market players will have time to react logically and not under pressure."
Credit rating agency Standard & Poor’s downgraded the US’s rating late Friday by one notch, from the sterling AAA to AA+. The cut is expected to reverberate across world markets.

The Israeli exchange’s TA-25 blue chip index fell as much as 6.5 percent in pre-opening activity.

The exchange operates on a Sunday through Thursday schedule, and is one of the first worldwide to react to the ratings cut.

The delay followed an emergency meeting of top economic officials Saturday night at the home of Finance Minister Yuval Steinitz.

Steinitz summoned his deputy, Rabbi Yitzhak Cohen, as well as the deputy to the governor of the Bank of Israel, Dr. Karnit Flug, Chairman of the Israel Securities Authority Shmuel Hauser, Supervisor of Banks Dudu Zaken, Ministry of Finance Accountant General Michal Abadi, and Oded Sarig, commissioner of capital markets, insurance and savings in the Ministry of Finance.

Those who attended the meeting said they had been preparing for the downgrade in credit rating for some time. The Treasury, Bank of Israel, and Israel Securities Authority have held a number of meetings on the matter over the past few months.

A statement released after the emergency gathering said it remains unclear what kind of effect the downgrade will have on the world’s markets, but ensured that Israeli authorities were following developments closely.

"Despite our total confidence in the US’s economic prowess and its ability to recover from the crisis, the downgrade in credit rating constitutes a warning sign reminding all of us that we are still navigating the ship of Israeli finance in stormy waters," Steinitz said earlier Saturday.

Even as S&P insisted Saturday that its move shouldn’t have come as a shock, it reverberated around the world as political and financial leaders scrambled to assess its impact on the already troubled world economy.
China, the largest foreign holder of US debt, said Saturday that Washington needed to "cure its addiction to debts" and "live within its means," just hours after the S&P downgrade.

"The US government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," read a commentary by China’s state-run Xinhua news agency.

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