TEL AVIV -- The stock market here plunged Thursday following the most serious standoff yet between the Israeli army and Hezbollah troops since Israel withdrew from southern Lebanon in 2000.
The Tel Aviv 25 index, representing the country's largest corporations by market capitalization, fell 4.25% and has now fallen 8.2% in the last two trading days. The Tel Aviv 100 index fell 4.1% Thursday and is down 8% since Tuesday, while the banks index got slashed by 5.35%, bringing its two-day decline to 10%. Many investors view Israeli bank shares as being most exposed to a possible economic downturn as consumer spending gets hurt.
"There is a certain panic in the market," says Gilad Altshuler, investment manager at the Tel Aviv-based brokerage firm Altshuler Shaham. "People are selling every type of security; we see it especially in currency trading and in declines in government bonds." ...
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