Despite three years of war and political turmoil, Israeli markets have rallied;
some investors see further upside if the opposition wins Tuesday’s vote because
it could reduce regional tensions and political risk. Polls show a dead heat:
neither the Likud-led bloc nor an opposition alliance centered on former
military chief Gadi Eizenkot is projected to reach the 61-seat majority in the
120-seat Knesset, increasing the likelihood of protracted coalition talks or
another election. JP Morgan says an opposition win that improves ties with
Western allies and halts the judicial reforms that sparked mass protests in 2023
could support the shekel, while another Netanyahu-led government could weaken
it. IBI chief economist Rafi Gozlan expects an opposition victory to boost
markets; likely market effects include a lower Israel risk premium, appreciation
pressure on the shekel and a positive domestic market reaction.
