Israeli Stocks Fall as Investors Fear Middle East Conflict


  • The recent attack on Israel has sent the Middle East into a new bout of geopolitical instability.
  • This will pose significant effects to the global economy as a whole.
  • But Israeli companies stand to shoulder the brunt of the impact as investors step back.
Israeli stocks - Israeli Stocks Fall as Investors Fear Middle East Conflict

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Two days ago, the Palestinian militant group Hamas launched a full-scale attack on Israel from the Gaza Strip. Since then, a full-scale conflict has escalated with many civilian casualties. CBS News reports that Israel has reported over 900 deaths so far, and Gaza’s Health Ministry has reported “at least 687” deaths. Israeli Prime Minister Benjamin Netanyahu responded to the crisis by informing his nation, “We are at war. Not an operation, not a round [of fighting,] at war!” Shortly after this declaration of war, Israel began launching retaliatory strikes on targets in Gaza. It is clear that the conflict’s impact will be felt long after the dust settles.

The global economic outlook will be severely impacted, but Israeli stocks are falling across the board.

What’s Happening With Israeli Stocks

As Israel enters a war footing, it’s no surprise that many Israeli stocks are struggling. The region is facing high uncertainty, which has likely compelled many investors to pull back on their positions in local companies. As the Times of Israel recounts of the Tel Aviv stock exchange:

“The TA-35 stock index of blue-chip companies falls 4.8%, the benchmark TA-125 index declines 5% and the TA-90 index, which tracks the shares with the highest capitalization not included in the TA-35 index, is down 5.8%.”

Some Israeli companies that are popular with U.S. investors are struggling today. Autonomous driving technology producer Mobileye Global (NASDAQ:MBLY) is down 5% for the day. Popular office software maker (NASDAQ:MNDY) has fallen a little over 4%, and gig economy marketplace Fiverr International (NYSE:FVRR) is down almost 3%. Teva Pharmaceutical Industries (NYSE:TEVA) is having a worse day, though, with losses of over 6%.

That said, while many sectors will suffer as a result of this conflict, some Israeli stocks are rising. Little-known tech stock Hub Cyber Security (NASDAQ:HUBC) has been surging since markets opened, rising a staggering 185% as of this writing. As InvestorPlace’s Eddie Pan reports:

“HUBC stock’s movement is interesting, as many had expected Israel-based companies to fall instead of rise. According to U.S. intelligence, there have not yet been any “major cyber campaigns” as part of the conflict. Still, The Jerusalem Post has reported that it has been the recipient of “sustained” and “coordinated” cyberattacks. At the time of this writing, its website is down and inaccessible.”

Pan also notes, though, that even with its recent spike, HUBC stock is still down almost 60% year-to-date. (YTD). Given its status as a penny stock, it may be hard for some investors to take its recent performance seriously. However, two Israeli companies that operate in the aerospace and defense sector, TAT Technologies (NASDAQ:TATT) and Elbit Systems (NASDAQ:ESLT) may see momentum if their services are needed.

What Comes Next

As of now, it’s impossible to say what investors should expect from Israeli markets. The entire Middle East region is likely to be drawn in, one way or another, to this conflict, leading to further economic complications. That may make it difficult for even the more risk-savvy investors to stake big bets on companies based in or around Israel, with the possible exception of the aerospace engineering and defense technology sectors.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Article printed from InvestorPlace Media,

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