The Tel Aviv Stock Exchange (TASE) experienced a positive trading session following a surprise decision by the Bank of Israel to lower its benchmark interest rate by 0.25% to 3.25%. The move was unexpected by most analysts and came as the central bank cited a decline in the economy's risk premium and inflation converging toward its target.
The market reacted favorably to the news, with real estate and construction company stocks seeing notable gains. This was attributed to expectations that the lower interest rate will stimulate the housing market and reduce mortgage payments. In contrast, bank stocks declined as the rate cut could erode their interest income.