Israel** has regained all the ground lost since the war with Hamas, and investors are optimistic about the resilience of the Israeli economy, as fears that the conflict will spread to the wider Middle East have not yet materialized.
As of 11:15 a.m. local time, the Tel Aviv Exchange 35 Index was 09% to 183426 o'clock. It is now above the level of October 5, the last trading day before Hamas's devastating attack on southern Israel.
After the outbreak of the war, Israel's assets fell sharply. The currency shekel fell to its lowest point since 2012, bond yields soared, the market was about 15%, and nearly $25 billion in value evaporated.
These assets have been restored since late October, although the war in the Gaza Strip continues to rage. It depends on the Bank of Israel launching a $45 billion monetary support package and signals that radical groups such as Iranian-backed Allah (Hezbollah) will avoid all-out attacks on Israel.
Since the beginning of November, the global ** and bond markets have also boosted the Israeli market. Earlier, the Fed further signaled that it would end its rate hikes.
Israel's ** is still cheap relative to most other markets. The Tel Aviv** Exchange 35 is trading at a much lower forward price-to-earnings ratio than the S&P 500 or MSCI IncEmerging market stock indices.
There are still a lot of risks involved in traders of Israeli assets. The fighting in the Gaza Strip is far from over, despite escalating pressure for Israel to cease ground operations. In recent weeks, Yemen's Houthi rebels have attacked several ships inside and outside the Red Sea, leading the United States to consider military action against the group.
The conflict continues to take a huge toll on Israel's finances. The Bank of Israel estimates that the cost – mainly in the form of higher defense spending – will amount to $53 billion. Many businesses are struggling with thousands of workers who have been drafted into the military.
According to Israeli authorities, Hamas, designated a terrorist organization by the United States and the European Union, killed 1,200 people and kidnapped 240 people in the October 7 incursion. According to the health ministry of the Hamas-controlled Gaza enclave, more than 1 has been in retaliation since Israel retaliated with air and ground attacks80,000 Palestinians have been killed in Gaza.