Israeli financial markets closed the first trading session of 2026 on a decisively positive note, marking a strong start to the year across equities and fixed income. Broad-based buying, led by mid-cap stocks and banks, reflected improving investor sentiment and optimism around domestic growth prospects.

Equity Markets Rally on Broad Participation

Equity benchmarks on the Tel Aviv Stock Exchange delivered a synchronized advance. The TA-35 rose 1.76% to 3,695.29 points, while the broader TA-125 climbed 1.90% to 3,733.08. Market breadth was notably strong, with advancing stocks vastly outnumbering decliners across all major indices.

Mid-cap shares stood out, with the TA-90 surging 2.40%, signaling renewed appetite for growth-oriented and domestically focused companies. The strong participation suggests that investors are not merely rotating into defensives, but are selectively increasing exposure across the equity spectrum as the new year begins.

Banks and Value Stocks Drive Outperformance

Financial stocks played a central role in the session’s strength. The TA-90 and Banks index jumped 2.85%, outperforming the broader market. This move points to improving confidence in credit conditions, balance-sheet resilience, and earnings visibility within Israel’s banking sector.

Value-oriented equities also attracted significant inflows. The TA-125 Value index advanced 2.01%, reflecting investor preference for companies with tangible cash flows and established business models. In an environment where global markets remain sensitive to interest rate expectations, value exposure appears to be regaining favor as a stabilizing allocation.

Bond Market Strength Signals Balanced Risk Appetite

Fixed-income markets complemented the equity rally rather than acting as a counterbalance. The All-Bond General index gained 0.11%, while inflation-linked and short-duration bond indices also closed higher. Notably, the Tel Bond 60 Linked and Tel Bond Linked A indices both recorded solid advances with minimal declines.

Trading volumes underscored the constructive tone. Bond market turnover exceeded equity volumes, with approximately ₪4.26 billion traded in bonds compared to ₪2.96 billion in equities. This pattern suggests institutional participation and portfolio rebalancing rather than short-term speculative flows.

Looking ahead, investors will monitor whether this early momentum can be sustained as macroeconomic data, inflation trends, and central bank policy expectations come into sharper focus. Opportunities may emerge in sectors tied to domestic consumption, financial services, and value-oriented equities, while risks remain linked to global market volatility and geopolitical uncertainty. The strong start to 2026 sets a constructive baseline, but durability will depend on earnings follow-through and continued confidence in Israel’s economic outlook.