Israeli financial markets closed Thursday, January 29, 2026, with a subdued and cautious tone as investors continued to digest the recent volatility. Trading on the Tel Aviv Stock Exchange reflected an environment of hesitation, where modest headline moves in large caps contrasted with persistent weakness beneath the surface.

TA-35 Holds Steady but Lacks Conviction

Large-cap stocks showed relative resilience but failed to generate meaningful upside momentum. The TA-35 slipped just 0.04 percent to close at 3,978.87 points, ending the session essentially unchanged. Advances and declines within the index were nearly balanced, underscoring the lack of strong directional conviction.

While the TA-35 has managed to stabilize just below the 4,000 level, the inability to reclaim that threshold highlights investor reluctance to add exposure aggressively. The index’s behavior suggests consolidation rather than renewed strength, with large caps acting as an anchor while the broader market remains under pressure. Trading volumes were moderate, consistent with a wait-and-see approach among institutional participants.

Mid-Caps and Banks Extend Relative Underperformance

Weakness was more pronounced across the rest of the market, reinforcing the cautious narrative. The TA-90 declined 0.81 percent, as decliners more than doubled advancers. The combined TA-90 and Banks index fell 0.90 percent, pointing to continued pressure on financial stocks and domestically focused companies.

The TA-125 ended down 0.21 percent, with 77 declining stocks against 43 advancing. Value stocks were marginally lower as well, with the TA-125 Value Index slipping 0.03 percent, suggesting that even traditionally defensive equity segments are struggling to attract fresh demand.

The TA Sector-Balance Index dropped 0.24 percent, indicating that weakness remains spread across industries rather than isolated to a single sector. This persistent underperformance in mid-caps and sector-balanced indices highlights ongoing risk aversion and reinforces the view that investors are trimming exposure selectively rather than rotating decisively back into growth.

Bond Markets Edge Lower as Uncertainty Persists

Fixed income markets offered limited support during the session. Short-term bonds slipped 0.01 percent, while the All-Bond General Index declined 0.05 percent. Inflation-linked bonds were also slightly weaker, with Tel Bond-Adjacent A down 0.08 percent and Tel Bond 60 Inflation-Linked ending flat.

The modest declines across bond indices suggest that investors are not rushing into defensive assets, but neither are they embracing risk with confidence. Instead, portfolios appear to be adjusting incrementally as market participants await clearer signals on direction. The lack of strong bond inflows indicates that concerns remain contained, but uncertainty is sufficient to keep capital on the sidelines.

This muted behavior across both equities and bonds underscores a market in transition, balancing between stabilization and the risk of renewed downside.

Looking ahead, investors will be closely watching whether the TA-35 can regain the 4,000 level and whether selling pressure in mid-caps begins to ease. Key factors to monitor include market breadth trends, particularly within the TA-90 and banking indices, and any shift in bond market behavior that could signal rising defensive demand. Opportunities may emerge if consolidation resolves to the upside and confidence returns selectively to oversold segments. However, risks remain elevated if mid-cap weakness persists and large caps lose their stabilizing role. The coming sessions should help determine whether Israeli markets are forming a base for recovery or drifting toward a deeper consolidation phase as January draws to a close.