JERUSALEM (JTA) — The Tel Aviv Stock Market experienced its largest one-day loss in nearly three years in reaction to the downgrade of the U.S. credit rating.
The exchange’s TA-25 benchmark index of 25 stocks fell 7 percent on Sunday to 1,074.27 — the biggest drop since November 2008 at the beginning of the global economic crisis — despite a delayed opening by nearly an hour to allow traders to react to the news on the U.S. downgrade without pressure.
Standard & Poor’s on Aug. 5 downgraded the U.S. credit rating from AAA, the top designation it had held since 1941, to AA+. The downgrade is likely to result in steeper interest costs on U.S. government bonds, eventually leading to less disposable income.
Analysts reportedly believe that Saturday night’s massive protests throughout Israel against the high cost of living also contributed to the plunge, Haaretz reported.
Since the Tel Aviv Stock Exchange operates Sunday through Thursday, it was one of the first stock exchanges worldwide to react to the U.S. credit rating downgrade.