Global markets tumbled on Monday with investors bracing for certain economic fallout over the worldwide coronavirus outbreak.
According to US media, Wall Street suffered its worst trading day since the financial crisis of 2008: The Dow sunk more than 2,000 points, and London's FTSE 100 plunged to a three-year low after oil prices plummeted by 30%. The main financial indices in the US closed down by over 7%, while London's index ended Monday's trading day nearly 8% lower.
Follow Israel Hayom on Facebook and Twitter
The Tel Aviv Stock Exchange also tumbled on Monday over fears of the spread of the coronavirus in Israel. Trading was postponed by 30 minutes early in the day and was suspended shortly in the afternoon to prevent the market from free-falling.
According to financial daily Globes, by the end of Monday's trading, the Tel Aviv 35 Index fell by 6.25%, TA-125 dropped by 6.63%, the BlueTech Global Index tumbled by 6.43%, and the TelBond 20 corporate bond index slipped by 2.31%. Turnover totaled a NIS 4.8 billion in equities and NIS 13.5 billion in bonds.
Meanwhile, the Bank of Israel on Monday cut its economic growth forecast for the Israeli economy to 2% because of the effects of the coronavirus pandemic. Bank officials did, however, say they believe growth will rebound to 3.9% in 2021, compensating for the damage in 2020.
Israeli media says the central bank's updated scenario assumes that there will not be a mass outbreak of coronavirus in Israel and that the crisis will be over by the end of June.
At the same time, the central bank stresses that "this is a developing situation, and there is great uncertainty over how the virus will continue to spread and the consequences for economic activity globally and in Israel, which will affect the degree of impact on economic growth."
Also on Monday, the tumbling financial markets saw the investing public redeem about NIS 11 billion ($3 billion) from managed funds.
Israel Securities Authority Director Anat Guetta urged cooler heads to prevail: "I would say to investors, and in general, that making hasty decisions serves no-one's interest, a principle relevant to all areas of life, investment in the capital market among them. Even at this challenging time, we recommend that investors should consider their steps calmly, giving the appropriate weight to their personal needs and the relevant investment horizon."
