Israeli markets closed Monday, December 22, with a mixed but generally constructive tone as investors balanced blue-chip strength against softer mid-cap performance and cautious bond trading. Equity turnover remained healthy, while bond-market activity surged, reflecting active portfolio adjustments as the year-end approaches. The session highlighted a market that is still advancing, but with growing selectivity beneath the surface.

TA-35 Pushes Higher as Large Caps Remain in Favor

The TA-35 index rose 0.73% to 3,708.78 points, continuing its recent upward trajectory and reinforcing the leadership role of Israel’s largest companies. Market breadth was supportive, with 23 advancing stocks versus 10 decliners and two unchanged, indicating broad participation among blue-chip names. Trading volume reached approximately ₪1.83 billion, underscoring steady institutional involvement. Strength was concentrated in financially robust companies with strong balance sheets and earnings visibility. Investors appear increasingly comfortable allocating capital to large-cap equities as global markets stabilize and year-end positioning becomes more pronounced. The TA-35’s performance suggests confidence in core holdings, even as other parts of the market show signs of consolidation.

Mid-Caps Show Hesitation Despite Broader Market Gains

In contrast to blue-chip strength, the TA-90 edged lower by 0.18% to 3,803.08 points. Decliners slightly outnumbered advancers, reflecting a more cautious stance toward mid-cap stocks that are often more sensitive to domestic economic conditions. Trading turnover was more subdued compared with large caps, signaling selective participation rather than broad selling pressure. The TA-90 and Banks index managed a modest 0.39% gain, indicating that banking stocks continue to provide support even as non-financial mid-caps soften. Banks remain a focal point for investors due to their role in credit growth and financial stability, though breadth in this segment was evenly balanced. The broader TA-125 index advanced 0.51%, supported by gains in large-cap and value-oriented stocks. The TA-125 Value index rose 0.46%, showing continued interest in companies offering relatively attractive valuations and steady cash flows. Meanwhile, the TA Sector-Balance index added 0.17%, suggesting that sector performance was mixed but generally stable.

Bond Market Trades Mixed as Turnover Surges

The bond market delivered a more cautious performance, even as trading activity reached elevated levels. The All-Bond General index slipped 0.03%, with decliners outnumbering advancers, reflecting mild pressure across a broad range of fixed-income securities. Notably, bond-market turnover exceeded ₪5.4 billion, far surpassing equity turnover and highlighting active repositioning by investors. Short-term bonds edged higher by 0.01%, maintaining their appeal as low-risk instruments amid mixed equity signals. Inflation-linked bonds showed divergent results: Tel Bond-Linked A rose 0.03%, while Tel Bond 60-Linked declined 0.02%. These modest moves suggest stable but nuanced inflation expectations, with investors adjusting exposure rather than making decisive directional bets. The combination of high turnover and modest price movements indicates a bond market focused on rebalancing and liquidity management rather than strong conviction in a single direction.

Looking ahead, the mixed session reflects a market transitioning from broad rally mode to a more selective, stock-specific environment. Investors will be closely watching global interest-rate developments, inflation data, and geopolitical signals that could influence risk appetite into year-end and early 2026. Opportunities may remain in large-cap and value-oriented equities that continue to show resilience, while mid-caps could regain momentum if confidence improves. At the same time, risks include profit-taking after recent gains, shifts in global bond yields, and heightened volatility tied to external events. Monitoring market breadth, turnover patterns, and the balance between equities and bonds will be key to assessing whether the current uptrend can be sustained in the sessions ahead