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Israeli Stock Exchange Plunges, Recovers

It was a volatile, but positive, day on the Israeli stock exchange, one of the few in the world that conduct business on Sunday. Robert Berger reports from the VOA bureau in Jerusalem.

The Tel Aviv stock exchange delayed opening by 45 minutes amid fears that stocks would collapse.

The stock market had been closed for four days because of the Jewish High Holy day of Yom Kippur, the Day of Atonement. When it opened, stocks plunged by more than nine percent, prompting Prime Minister Ehud Olmert to urge the public not to panic.

Speaking at the weekly Cabinet meeting, Mr. Olmert said Israeli banks and the financial system are stable, and there is no reason to fear or act irrationally.

As the day wore on, the stock exchange recovered much of its losses.

"The fact that we have had a positive day is in itself very good news. It would be very nice to be able to attach greater significance to that. I think it is premature," said Israeli economist Pinchas Landau.

"In the very best case, the market may be reacting to, not only to the great efforts being made by the government here and indeed the entire economic establishment to calm people down, but more importantly all eyes are on the meetings in Washington and today in Europe and the decisions that people are hoping to hear from the leaders of Europe and indeed of the entire world," he said.

Israel's banking system has remained stable because is not exposed to the disastrous mortgage investments that sparked the global economic meltdown. At the same time, Israel relies heavily on exports to the West. So while it may not be as hard hit as the US, Europe and Asia, experts say that in a global economy Israel is not immune to recession.