Tel Aviv stocks tumble as global coronavirus fears continue

By 3 p.m., the exchange’s flagship TA-35 index slumped by 7.92% and the TA-125 index dropped by 8.13%.

An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel (photo credit: REUTERS)
An electronic board displaying market data is seen at the entrance of the Tel Aviv Stock Exchange, in Tel Aviv, Israel
(photo credit: REUTERS)
Shares on the Tel Aviv Stock Exchange declined Monday as coronavirus fears continued to dictate global market activity. At the close, the TA-35 index fell 4.33%, and the TA-125 index dropped 4.68%.
Wide-ranging shifts in monetary policy by central banks failed to instill confidence in nervous investors.
The Israeli banking sector had large declines as the Bank of Israel ordered most branches to shut their doors to customers.
Shares in Fattal plummeted 37.06% after it announced the closure of 50 hotels in Israel and Europe.
The US Federal Reserve's second emergency rate cut in as many weeks to blunt the economic impact of the coronavirus failed to calm fears of a prolonged recession.
The magnitude of the Fed's rate move and other measures on Sunday, backed by global central banks, unnerved investors as the breakneck spread of the outbreak – all but shutting down some countries – outweighed the policy response to ensure liquidity in markets.
The S&P 500 plunged 13% on Monday to trigger an automatic 15-minute halt in trading on the three main US stock indexes. The halt was the fourth emergency pause on Wall Street in six days. It tumbled 8% at the opening, triggering a 15-minute halt of Wall Street's three main indexes for the third time in six days, as traders reacted to drastic weekend measures from the Federal Reserve to stave off a global recession.
The second emergency cut in interest rates by the US central bank in a fortnight only added to the sense of panic among investors, worried that the coronavirus pandemic is paralyzing supply chains and squeezing company finances.
Chinese data underscored just how much economic damage the disease has already done to the world's second-largest economy, with official numbers showing the worst drops in activity on record. Industrial output plunged 13.5%, and retail sales dropped 20.5%.
Supervisor of Banks Hedva Ber instructed Israeli banks to reduce their face-to-face services to a limited number of branches across the country, seeking to strike a balance between continuity of banking services while reducing risks to public health.
At least a quarter of the bank’s branches must be designated as "core branches" where services will be provided to the public, including expanded services for customers aged over 70, while banks are recommended to implement measures to prevent crowding.
"We are taking this measure following instructions from the Health Ministry to reduce activity and movement in the public space," Ber said. "The measure will enable continuity in the provision of banking services to the broad public, while maintaining the health of the public and of bank employees. I call on the public to make all banking transactions through direct means: by phone, ATMs, banking applications and bank websites.”
Labor and Welfare Minister Ofir Akunis and National Insurance Institute director-general Meir Spiegler agreed to roll out a series of measures to assist business owners and self-employed workers.
Measures include the deferral of social-security and health-insurance payments for April and implementing an absolute freeze on debt enforcement procedures, including those for foreclosures.
"In the past few days, I have been in continuous contact with all the entities and organizations representing different sectors affected by the coronavirus crisis," Akunis said. "The Labor and Welfare Ministry has a significant role in attempting to make it as easy as possible for employees and employers in the market. Requests made by the self-employed and employers found attentive ears and led us to the decision on a series of relief measures."
According to figures published by the Manufacturers Association of Israel, quarantine measures affecting some 70,000 employees have cost businesses about NIS 500 million to date, in addition to losses worth nearly NIS 3.9b. caused by the coronavirus outbreak.
The manufacturers association, together with the Association of Craft and Industry and the Israeli Organization of Cleaning Companies, submitted a petition to the High Court of Justice on Monday, demanding that the government fund the cost of days spent by workers in quarantine.
Struggling airline El Al said it was holding discussions with the Finance Ministry to receive assistance to cope with the impact of the coronavirus outbreak. Precise details of support sought by the airline were not disclosed.
As passenger demand drops across the global aviation industry, Ramon International Airport announced it would shut down every night from 10 p.m. until 6 a.m. starting Wednesday.