Israeli financial markets closed Monday, January 26, 2026, on a positive note as the recovery that began last week continued to build momentum. Trading on the Tel Aviv Stock Exchange reflected improving confidence, with equities advancing across the board and fixed income markets remaining calm, reinforcing the sense that recent volatility is giving way to a more stable market phase.

TA-35 Breaks Above 4,000 as Large Caps Lead Steadily

Large-cap stocks once again provided a solid foundation for the market’s advance. The TA-35 rose 0.48 percent to close at 4,005.65 points, reclaiming the psychologically important 4,000 level. Advances modestly outpaced declines within the index, highlighting orderly buying rather than aggressive chasing.

The move higher suggests that investors are increasingly comfortable re-establishing exposure to Israel’s most liquid companies after the sharp mid-January pullback. Equity turnover reached approximately 3.81 billion shekels, a healthy level that indicates institutional participation without signs of overheating. The steady nature of the advance points to accumulation driven by longer-term positioning rather than short-term momentum trades.

Mid-Caps and Banks Confirm Broader Participation

Strength was not limited to blue chips, reinforcing the constructive tone. The TA-90 gained 0.57 percent, while the combined TA-90 and Banks index advanced a stronger 0.96 percent. In both indices, advancing stocks outnumbered decliners, signaling renewed confidence in growth-oriented and financial names that were heavily sold during the recent correction.

The TA-125 rose 0.48 percent, with a broadly balanced internal structure that suggests healthy participation across market segments. Value stocks also contributed to the upside, as the TA-125 Value Index added 0.42 percent, indicating that investors continue to rotate back into names perceived as attractively valued after last week’s reset.

The TA Sector-Balance Index climbed 0.59 percent, reflecting gains across multiple industries rather than concentration in a single sector. This kind of diversified participation is often associated with more sustainable advances, as it reduces reliance on a narrow group of market leaders.

Bond Markets Remain Calm as Risk Appetite Stabilizes

Fixed income markets offered a supportive and largely uneventful backdrop. Short-term bonds were unchanged, while the All-Bond General Index edged up 0.06 percent. Inflation-linked bonds were mixed to slightly higher, with Tel Bond 60 Inflation-Linked rising 0.07 percent, indicating contained inflation expectations and stable demand for real-rate exposure.

Bond market turnover totaled roughly 3.65 billion shekels, closely matching equity turnover. This balance between asset classes suggests that investors are not rotating aggressively out of bonds, but are instead maintaining diversified portfolios as equity confidence improves. The absence of stress in bonds reinforces the view that the current equity recovery is unfolding in an orderly macro environment.

Taken together, the parallel stability in bonds and gains in equities point to normalization after the heightened volatility seen earlier in the month. Liquidity conditions appear supportive, and there are no immediate signs of systemic pressure.

Looking ahead, investors will be watching whether the market can hold above newly reclaimed levels and extend gains into the end of January. Key factors to monitor include follow-through buying in mid-cap and banking stocks, the durability of market breadth, and bond market behavior for early warning signs of renewed caution. Opportunities may emerge if consolidation above current levels attracts fresh inflows, particularly into value and domestically focused sectors. Risks would rise if momentum fades quickly or global market volatility reasserts itself. The coming sessions should help clarify whether Israeli markets are transitioning into a more durable uptrend or preparing for another phase of consolidation after this recovery push.