Israel’s stock market drops as exit polls show no clear election winner

What the report says

Israel’s benchmark Tel Aviv 125 share index fell sharply on Wednesday after exit polls from the country’s parliamentary election pointed to an inconclusive result, according to Al Jazeera. The index dropped by more than 2 percent in early trading and at one point fell as much as 3.5 percent, as investors reacted to uncertainty over who will lead the next government.

The article said neither Prime Minister Benjamin Netanyahu’s right-wing coalition nor the opposition bloc led by Gadi Eisenkot appeared to be on track for a majority in the 26th Knesset. With more than three-quarters of votes counted, Israeli media tallies showed Netanyahu’s bloc ahead on 54 seats, compared with 47 for Eisenkot’s camp. A governing majority in the 120-seat parliament requires 61 seats.

Al Jazeera framed the vote as Israel’s first election since the start of the war in Gaza, noting that the country’s economy has remained relatively strong despite wartime conditions and continued investment in the tech sector. The report also cited official growth figures and a recent upward revision to the Bank of Israel’s forecast, underscoring that the market reaction was driven more by political uncertainty than by immediate economic weakness.

The development matters because coalition-building in Israel can shape policy on security, the war in Gaza, and economic management. Final seat counts and formal government negotiations will determine whether a stable governing alliance can be formed.