Israeli financial markets closed Friday, January 23, 2026, on a firm note as investors continued to rebuild exposure following the sharp selloff earlier in the week. Trading on the Tel Aviv Stock Exchange showed improving confidence, with gains spread across major equity indices and fixed income markets remaining stable, reinforcing the view that the recent downturn was corrective rather than structural.

TA-35 Grinds Higher as Blue Chips Regain Stability

Large-cap stocks provided a steady anchor for the market’s advance. The TA-35 rose 0.34 percent to close at 3,986.63 points, continuing the recovery from recent lows. While the magnitude of the gain was moderate, internal dynamics were constructive, with advancing stocks outnumbering decliners and no unchanged constituents, signaling consistent participation.

Trading volume in the TA-35 exceeded 3.4 billion shekels, highlighting solid institutional involvement. The intraday chart showed a gradual upward bias rather than sharp spikes, suggesting accumulation rather than short-term speculation. This behavior indicates that investors are growing more comfortable holding exposure to Israel’s largest companies, viewing recent volatility as an opportunity to re-enter positions selectively.

Mid-Caps and Sector Indices Drive Upside Participation

Strength was more pronounced outside the large-cap segment, underscoring a broader re-engagement with risk. The TA-90 climbed a strong 1.21 percent, with 61 advancing stocks against 25 decliners. This performance signals renewed interest in domestically focused and growth-oriented companies, which had borne the brunt of the earlier selloff.

The combined TA-90 and Banks index gained 0.45 percent, while the TA-125 advanced 0.53 percent. Value stocks continued to participate in the recovery, as the TA-125 Value Index rose 0.67 percent, suggesting that investors are rotating back into segments perceived as attractively priced after the correction.

The TA Sector-Balance Index stood out with a 0.92 percent gain, reflecting strength across a wide range of industries rather than narrow leadership. Equity market turnover reached approximately 4.64 billion shekels, reinforcing the credibility of the advance and indicating that the rebound is supported by active participation rather than thin trading conditions.

Bond Markets Remain Supportive as Risk Appetite Improves

Fixed income markets delivered a calm and supportive performance alongside equities. Short-term bonds rose 0.03 percent, while the All-Bond General Index also edged up 0.03 percent, reflecting balanced demand across the bond complex. Inflation-linked bonds posted modest gains, with Tel Bond-Adjacent A advancing 0.18 percent and Tel Bond 60 Adjacent rising 0.08 percent.

Bond market turnover totaled roughly 2.29 billion shekels, lower than equity turnover but indicative of continued engagement. The parallel strength in equities and bonds suggests that liquidity conditions remain favorable and that investors are not signaling heightened stress. Instead, portfolios appear to be shifting gradually back toward risk while maintaining diversification across asset classes.

The absence of a sharp defensive move into bonds reinforces the view that confidence is stabilizing and that recent volatility has not triggered broader concerns about financial conditions or systemic risk.

Outlook

Looking ahead, investors will be watching closely to see whether this recovery can evolve into a sustained upward trend or stalls near recent resistance levels. Key factors to monitor include follow-through buying in mid-cap and banking stocks, market breadth consistency, and bond market behavior for early signals of renewed caution. Opportunities may emerge if improving sentiment is supported by continued volume and stable global markets, while risks would rise if gains narrow or selling pressure reappears near recent highs. The next sessions will be critical in determining whether Israeli markets are transitioning into a more durable recovery phase or settling into another period of consolidation after a volatile January stretch.