March 8, 2020 / 12:56 PM / a month ago

UPDATE 1-Tel Aviv stocks slide 4% on coronavirus escalation fears

(Adds analyst comments, details)

By Tova Cohen

TEL AVIV, March 8 (Reuters) - Tel Aviv Stock Exchange indexes were down 4% on Sunday as investors worried about an escalation in the coronavirus outbreak, analysts said.

The fall in the blue chip Tel Aviv 35 and the broader TA-125 outpaced declines of less than 2% on Wall Street on Friday, when the Israeli market was closed, bringing Tel Aviv’s losses to 12% since the start of 2020.

Sabina Levy, head of the research department at Leader Capital Markets, pointed to statements from the prime minister and health minister suggesting there might be a further escalation in the virus in the coming days and stricter government policies aimed at hindering any local outbreak.

The health ministry has scheduled a news conference for later on Sunday, while local media reported that Israel, which has had 25 cases of the virus so far, is considering restricting the entry of visitors from parts of the United States.

Israel last week ordered travelers arriving from Germany, France, Spain, Austria and Switzerland to go into home quarantine over coronavirus concerns.

The measure effectively cut off foreign tourism from those countries, whose citizens, the health ministry said, would not be allowed into Israel unless they could show they had made quarantine arrangements ahead of time.

Israel had already imposed the edict with regard to flights from Italy, China, Thailand and Singapore.

“We are in the midst of a global pandemic, even if this has not been declared officially,” Prime Minister Benjamin Netanyahu said at the start of the weekly cabinet meeting on Sunday. “Today, I will update the government on the steps I have decided on together with my fellow ministers regarding the coronavirus.”

The spread of the virus in the United States and Europe and a lockdown in northern Italy are adding to fears in the Israeli market, Levy said.

“In the worst case scenario if we find ourselves in a lockdown like we see in several other countries this might have a really negative influence on economic activity in Israel,” she told Reuters.

Energy and real estate were among the hardest hit sectors in the market, while shares in El Al Israel Airlines fell 6.4% after it warned of an even bigger decline in revenue for the start of the year than previously thought due to the coronavirus. (Additional reporting by Ari Rabinovitch and Dan Williams; Editing by Mark Potter)

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