"There are many reasons to worry," said Amir Kahanovich, chief economist at Phoenix Insurance Company & Excellence Nessuah Investment House.
At the end of the day, the stock market closed with sharp declines across the board: the value of Tel Aviv 35 dropped 5.1
since August 7, 2011; All shares of the TA-125 Index were traded in a negative direction while the index itself fell by 4.7%. and the Bank Shares Index fell 4.1%.
Shares that fell sharply included Perrigo's global healthcare provider, which fell 29%. Israel's Teva Pharmecutical Industries slipped 8%; the Delek Group, whose shares fell 5.7%; and several IT stocks such as Hilan and Matrix, which fell 5.8% to 5.9%.
Perrigo, Kahanovich said, saw that his shares suffered not only from the general decline in the stock markets, but also from the news of a massive tax bill for their subsidiary in Ireland. Perrigo is one of the largest stocks on the Tel Aviv Stock Exchange, and its decline has contributed to the overall decline in the indices.
So what exactly happens? "We are in a sharp decline and continue the trend that began in most world markets in October," said Kahanovich. "Many markets have already lost more than 20%, and the Tel Aviv Stock Exchange is responding accordingly."
Kahanovich was careful to brand the downturn as a crash.
"Long-term investors should not be so worried, but in terms of recent investors, this is actually a crash, and from a long-term perspective, the market is very high compared to recent markets," he said.