Tel Aviv Defense Stocks Plummet Amid US Political Shift and Budget Concerns
Tel Aviv defense stocks tumbled amid political uncertainty and US election shifts, with the sector index dropping 4.5% and approaching a 50% decline from its March peak.
Tel Aviv Stock Exchange indices closed in negative territory amid political uncertainty and US midterm election results. Defense stocks led the market downturn, shedding about 4.5% during the session and extending their 30-day loss to nearly 14%. Since peaking in mid-March, the dedicated defense index has plummeted by nearly half.
Major sector players, including benchmark constituents Elbit Systems and Next Vision, bore the brunt of the losses alongside smaller firms like PCB, Imco, Othe, and TSG. Analysts note that the slump reflects a broader global sentiment shift following Democratic election victories and concerns over potential US defense budget reviews under President Donald Trump.
Market experts point to additional pressures, including US administration announcements regarding defense aid adjustments, as well as shifting geopolitical prospects. Analysts emphasize that easing regional tensions diminishes the immediate attractiveness of defense equities, while recent lower forecasts from European defense giant Rheinmetall have further cooled investor expectations.
