Israeli stocks were broadly lower Wednesday amid uncertainty about the future government following Kadima's narrow election win.
The TA-25 and TA-100 indexes were each down 1.8 percent, paced by declines in the financial sector, which is most sensitive to economic developments. The Finance-15 index lost 2.9%.
Kadima landed 28 seats in Tuesday's election but traders had hoped for a stronger showing to ensure continuation of the party's economic policies. Now, however, the future is uncertain because Kadima must put together a coalition that could result in a move away from the status quo.
Shares of Bank Leumi and Bank Hapoalim were among the decliners despite posting higher fourth-quarter earnings. Israel Discount Bank fell after swinging to a fourth-quarter loss after a payment related to a money-laundering probe at its New York operations and an early retirement provision.