Israel-Iran Tensions Rattle Markets; TA-35 Dives 2%

 

Tel Aviv, June 12, 2025 – Escalating tensions between Israel and Iran triggered a sharp selloff in Tel Aviv stocks on Thursday, with the benchmark TA-35 index plunging 2.3% to 2,671. Global markets also turned cautious as fears of a military confrontation grew.

Market Turmoil: Israel’s TA-35 index erased nearly two months of gains, while European and U.S. futures declined.

Diplomatic Strain: The U.S. began relocating non-essential embassy staff from Iraq amid reports of Israel preparing for a potential operation in Iran.

Nuclear Standoff: Iran threatened to attack U.S. bases if nuclear talks fail, heightening geopolitical risks.

 

Israel: The TA-35’s drop followed an 11% rally in the past two months. Banking and tech stocks led the decline.

Global Ripple Effect:

MSCI World Index dipped 0.1%.

Europe’s STOXX 600 fell 0.8%, with airlines and autos under pressure.

Indian benchmarks Sensex and Nifty dropped over 1%.

Analysts attribute the selloff to profit-booking and risk aversion. "Investors are pricing in prolonged Middle East instability," said David Cohen, a Tel Aviv-based strategist.

Markets will track Israel-Iran rhetoric and U.S. diplomatic moves. Safe-haven assets like gold and the dollar may gain further.