Tel Aviv Stock Exchange Reacts to Escalating Conflict with Hezbollah
The Tel Aviv Stock Exchange (TASE) experienced a decline on Tuesday, with its TASE 35 index falling by more than 0.6% amid rising tensions following Israel's announcement of a limited ground operation in southern Lebanon. The index, which tracks the 35 most active companies, dropped from a record high of 2,108 points, reflecting investor concerns over the geopolitical risks associated with the escalating conflict. This downturn follows a period where the index had largely ignored the recent assassination of Hezbollah leader Hassan Nasrallah and the intensifying hostilities in the region.
In parallel, Moody's downgraded Israel's credit rating by two notches, citing significant geopolitical risks due to the ongoing conflict with Hezbollah and the potential for a prolonged war. The agency's decision to lower Israel's rating from "A2" to "Baa1" was described as an "economic blow" by Israeli officials, highlighting the financial implications of the military actions. This downgrade marks the second time this year that Moody's has adjusted Israel's credit rating downward, following a previous downgrade linked to the war in Gaza.
As the Israeli Defense Forces (IDF) confirmed the initiation of targeted attacks against Hezbollah in southern Lebanon, the situation remains precarious. The IDF's operations were described as necessary to counter immediate threats to northern Israeli communities, with artillery and air support being utilized in the strikes. The situation has led to fears of a broader regional conflict, with reports of significant casualties on both sides, including over 1,073 fatalities in Lebanon since the escalation began on September 23.
The international community is closely monitoring the situation, with various countries, including the United States and Italy, expressing concern over the humanitarian implications and urging for restraint. The US has been in discussions with Israel regarding the operations in Lebanon, emphasizing the need for limited actions focused on Hezbollah's infrastructure. Meanwhile, Israel's Prime Minister Benjamin Netanyahu has reaffirmed the country's commitment to its military objectives, stating that Israel is in a critical battle for its existence.
