Israel’s financial markets closed Tuesday, December 30, 2025, on a constructive note as investors embraced a late-year rebound following recent volatility. Trading on the Tel Aviv Stock Exchange reflected improving sentiment, with equities advancing broadly and turnover remaining elevated across both stock and bond markets as participants adjusted portfolios ahead of year-end.

Broad Equity Gains Signal Improving Risk Appetite

The rally was widespread, with all major equity benchmarks finishing the session in positive territory. The TA-35 rose 0.94 percent to 3,661.17 points, supported by strong participation across its components. Advancers outnumbered decliners by a wide margin, with 26 stocks higher versus just seven lower, underscoring a clear shift in market tone.

Mid-cap stocks outperformed once again, reinforcing the recovery narrative. The TA-90 gained 1.27 percent, while the TA-90 and Banks index climbed 1.08 percent. Strength in banking and domestically focused names suggests investors are growing more confident in local economic resilience, even as global markets continue to send mixed signals. The broad participation indicates that today’s gains were not driven by isolated names but reflected a wider reassessment of risk.

Market Breadth Turns Positive After Recent Volatility

Breadth indicators highlighted a notable improvement in sentiment. The TA-125 advanced 1.02 percent, with 94 stocks rising against 25 decliners and four unchanged. Value-oriented stocks also participated in the upside, as the TA-125 Value Index posted a 0.35 percent gain, suggesting that investors are selectively adding exposure rather than chasing high-beta momentum alone.

The TA Sector-Balance Index rose 1.04 percent, pointing to strength across multiple sectors rather than concentration in a single theme. This balanced advance is often associated with healthier market dynamics, as it implies diversification of buying interest. Combined with the recent pullback earlier in the month, the rebound may reflect bargain-hunting and portfolio rebalancing as the calendar year draws to a close.

Bond Market Mixed as Investors Rebalance Portfolios

While equities advanced, fixed income markets delivered a more nuanced performance. Short-term bonds edged down slightly, with the short-duration bond index slipping 0.01 percent. Inflation-linked bond indices also posted marginal declines, while the All-Bond General Index closed unchanged, reflecting stability rather than stress.

Trading activity in bonds remained robust, with turnover in the bond market exceeding 8.26 billion shekels, compared with roughly 3.91 billion shekels in equities. This divergence suggests investors are not abandoning defensive assets but are instead recalibrating allocations across asset classes. The mixed bond performance indicates caution remains present beneath the surface, even as equity sentiment improves.

Looking ahead, investors will be watching closely to see whether this late-December rally can carry momentum into the opening sessions of the new year. Key factors to monitor include global equity trends, interest rate expectations, and geopolitical developments that could influence risk appetite. Opportunities may emerge if improving breadth and participation persist, but risks remain if external volatility resurfaces or liquidity conditions tighten. The early days of January are likely to provide important signals on whether this rebound marks a durable turn or a temporary year-end adjustment.