Israel markets slide in fallout of Hamas attacks

Israeli stock and bond prices dipped on Sunday a day after Hamas terrorists killed at least 700 people and wounded thousands more in a series of rocket and gun attacks over the weekend.

Israel’s TA-35 Index, which is composed of 35 blue-chip companies, was down 6.47% on Sunday while the broader benchmark TA-125 index declined by 6.69%. Banking shares weighed heavily on both indices, declining by 9% with outflows of 2.2 billion shekels (or $573 million), with government bond prices also falling by up to 3% in the market’s initial response to the deadliest attack on Israel in decades.

Prime Minister Benjamin Netanyahu said Saturday that Israel is at war with Hamas in the wake of the attacks while the country’s security cabinet voted to officially declare war for the first time since the Yom Kippur War of 1973.

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"They attacked us on the ground, in the air, and also through the sea," said Israel Defense Force international spokesperson Lt. Col. Richard Hecht in a video posted to the IDF’s account on X, formerly known as Twitter. "They didn’t go for military targets. They went for civilians. They went for grandmothers, children, babies."

Hecht called the attacks by Iran-backed Hamas "barbaric" and likened images of the attacks to those carried out by the Islamic State. He said Israel would have a "very severe" response to Hamas and added, "In a way, this is our 9/11."

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Israeli Finance Minister Bezalel Smotrich said he has directed heads of ministry departments to provide budgets to help manage the war.

The Bank of Israel said it’s too early to assess the economic damage from the conflict but noted that the country’s 2014 war with Hamas terrorists in Gaza, which lasted 50 days and caused about 3.5 billion shekels in damage, or 0.3% of Israel’s gross domestic product (GDP).

The central bank has been projecting that Israel’s economy will grow by 3% in 2023 and 2024.

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Many Israeli businesses were closed Sunday, although the country’s Manufacturers’ Association said factories were still operating to limit concerns over any scarcity of food and other essential products.

"All companies will continue to operate as much as possible despite the difficult emergency conditions, the rocket barrages and the resulting shortage of workers," said association president Ron Tomer. "Thanks to Israel’s production independence … even in times of emergency, the residents of Israel will lack nothing."

Reuters contributed to this story.