Israeli financial markets closed Thursday, January 22, 2026, with a strong recovery as investors stepped back into risk assets following several days of sustained selling pressure. Trading on the Tel Aviv Stock Exchange reflected a notable shift in sentiment, with broad-based gains across equities and modest support from fixed income markets.

TA-35 Leads the Rebound as Blue Chips Attract Buyers

Large-cap stocks played a central role in the market’s rebound. The TA-35 climbed 1.04 percent to close at 3,973.26 points, recovering much of the ground lost during the recent pullback. Advancing stocks outnumbered decliners by a wide margin, with 30 gainers versus just five losers, underscoring the strength of the move.

The rebound in blue chips suggests that investors viewed recent declines as an overcorrection rather than the start of a deeper downturn. Large-cap names, often seen as bellwethers for market confidence, attracted renewed buying interest as valuations became more attractive. Equity turnover reached approximately 4.23 billion shekels, indicating that the rally was supported by meaningful participation rather than thin, short-term trading.

Mid-Caps, Banks, and Value Stocks Signal Broad Risk Re-Engagement

Strength extended well beyond the large-cap segment, reinforcing the relief-rally narrative. The TA-90 surged 1.58 percent, with 67 advancing stocks against just 18 decliners. The combined TA-90 and Banks index gained 1.47 percent, pointing to renewed confidence in financial stocks after several sessions of heavy pressure.

The TA-125 rose 1.19 percent, supported by 97 advancing securities versus 23 decliners. Value stocks were among the strongest performers, as the TA-125 Value Index jumped 1.49 percent, suggesting investors rotated back into names perceived as attractively priced following the selloff.

The TA Sector-Balance Index stood out with a 1.62 percent gain, reflecting strength across a wide range of industries rather than isolated sector leadership. This improvement in breadth is a key signal, as it indicates that buying interest was broad-based and not limited to a handful of oversold stocks.

Bond Markets Stabilize as Risk Sentiment Improves

Fixed income markets provided a steady backdrop to the equity rebound. Short-term bonds edged up 0.02 percent, while the All-Bond General Index added 0.03 percent, reflecting modest demand across a wide range of securities. Inflation-linked bonds also posted gains, with Tel Bond-Adjacent A rising 0.11 percent, while Tel Bond 60 Inflation-Linked slipped only marginally.

Bond market turnover totaled approximately 3.35 billion shekels, lower than equity turnover but indicative of continued engagement. The stabilization in bonds suggests that investors are not rushing into defensive positions, but are instead rebalancing portfolios as risk appetite improves. The absence of stress signals in fixed income supports the view that the recent selloff was corrective rather than systemic.

The parallel recovery in equities and stability in bonds often signals easing near-term concerns and a willingness among investors to re-enter positions selectively.

Looking ahead, market participants will be watching closely to see whether this rebound can extend beyond a single session or fades into another period of volatility. Key factors to monitor include follow-through buying in mid-cap and banking stocks, market breadth in upcoming sessions, and bond market behavior for signs of renewed defensive demand. Opportunities may emerge if improving sentiment is supported by sustained volume and stabilization in global markets, while risks remain if selling pressure reappears and recent lows are retested. The next few trading days should be critical in determining whether this move marks the start of a more durable recovery or a temporary relief rally within a broader consolidation phase for Israeli markets.