Market Resilience Asymmetry Under Extreme Shocks: A Comparative Analysis of the Tel Aviv Stock Exchange and B3 Brazil, 2019–2025
DOI:
https://doi.org/10.54878/fzak5b71Keywords:
Market resilience, Geopolitical risk, Emerging markets, TA-125, IbovespaAbstract
This study sets out to examine market resilience asymmetry between the Tel Aviv Stock Exchange (TASE) and B3 Brazil over the period spanning 2019-2025. Using annual return data for the TA-125 and Ibovespa indices obtained directly from official exchange statistics, this study seeks to examine if shock type, namely systemic global versus idiosyncratic country-specific, dictates market divergence direction and magnitude between these two major emerging markets. In the period between 2020-2025, TA-125 accumulated a local-currency return of +126.2%, compared to +39.3% for Ibovespa, where descriptive statistics indicated respective mean return standard deviation ratios of 0.694 and 0.383. The inter-market return correlation was computed as r ≈ 0.19 (n = 6, not significant). TASE's positive performance during this protracted period of armed conflict (2023-2025) constitutes an anomaly when applying conventional geopolitical risk models, explained by institutional investor mandate requirements, sectoral market responses, and adaptive market learning effects. The study's results have direct relevance for policymakers designing institutional investor portfolios, fund managers seeking optimal investment strategies in diversified emerging markets, and future generations of integrated geopolitical risk models accounting for country-specific structural moderators.
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