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Israel stocks plummet 7.68 percent after delayed opening

JERUSALEM- Israel's main stock index dived 7.68 percent Sunday when the Tel Aviv Stock Exchange opened after a four-day holiday weekend and a 45-minute delay enforced after a sharp drop in preliminary trading.

The TA-25 index, which includes the 25 largest Israeli companies by market capitalisation, dropped to 736.66 points while the Tel-Tech index, tied to the booming hi-tech industry, plunged 15.98 percent to 142.81 points.

In the first 20 minutes of trading the main index briefly dropped by another percentage point to 729.40 points, for a total loss of 8.59 percent.

The bourse, which has been closed for the past four days for the Yom Kippur holiday, is required to delay its opening if stocks drop more than five percent in early trading and to close if the TA-25 drops more than 12 percent.

Outgoing Prime Minister Ehud Olmert tried to reassure the market at a weekly cabinet meeting, telling reporters "there is no reason to be anxious."

"There is no reason to act irrationally. If we continue to act responsibly then the Israeli economy can overcome the global crisis," he said.

Israeli stocks had initially seen heavy losses from the global financial crisis but surged last week after the Bank of Israel announced a 0.5-point cut in its base rate to 3.75 percent.

The government has however ruled out any further direct intervention in the market for the time being.

Losses from the current financial crisis threaten to end five years of continual growth in the Israeli economy, the longest-running expansion in the country's history.

Before the onset of the global financial meltdown Israel's economy was expected to grow 5 percent in 2008.