Israeli financial markets closed Monday, February 2, 2026, on a notably strong footing as investors returned with renewed confidence following the choppy finish to January. Trading on the Tel Aviv Stock Exchange reflected a clear improvement in sentiment, with equities rallying broadly and fixed income markets providing a stable, reinforcing backdrop.

TA-35 Breaks Higher as Large Caps Reassert Leadership

Large-cap stocks led the advance, delivering a clear signal that buyers are back in control. The TA-35 jumped 1.14 percent to close at 4,049.32 points, decisively reclaiming levels above 4,000 after several sessions of hesitation. Advancers outnumbered decliners by more than three to one, underscoring the strength and conviction behind the move.

Turnover in the index exceeded 2.68 billion shekels, pointing to solid institutional participation rather than thin or speculative trading. The ability of the TA-35 to push higher with volume support suggests that investors are increasingly comfortable rebuilding exposure to Israel’s most liquid names, viewing recent pullbacks as a consolidation rather than a breakdown in trend.

Mid-Caps and Value Stocks Drive Broad Participation

Strength was not confined to blue chips, reinforcing the constructive tone. The TA-90 advanced 1.13 percent, while the combined TA-90 and Banks index gained 1.21 percent, highlighting renewed demand for growth-oriented and financial stocks that had lagged late in January.

The TA-125 rose 1.11 percent, supported by 86 advancing stocks against just 36 decliners. Value stocks were a standout, with the TA-125 Value Index surging 1.91 percent, signaling a decisive rotation back into attractively priced companies. The TA Sector-Balance Index added 1.24 percent, confirming that gains were spread across industries rather than driven by a narrow theme.

Equity market turnover totaled approximately 3.54 billion shekels, a robust level that reinforces the credibility of the rally. The improvement in breadth and leadership suggests that February has begun with a healthier market structure than that seen during the late-January pullback.

Bond Markets Advance Alongside Equities

Fixed income markets also moved higher, supporting the broader risk-on narrative. Short-term bonds edged up 0.01 percent, while the All-Bond General Index gained 0.08 percent. Inflation-linked bonds advanced as well, with Tel Bond-Adjacent A rising 0.11 percent and Tel Bond 60 Inflation-Linked adding 0.09 percent.

Bond market turnover reached roughly 3.67 billion shekels, closely matching equity turnover. The parallel gains in stocks and bonds suggest that liquidity conditions remain supportive and that investors are deploying capital across asset classes rather than rotating defensively. This environment typically reflects confidence in near-term macro stability and contained inflation expectations.

The calm behavior in bonds, combined with strong equity performance, indicates that the market’s focus has shifted away from risk reduction and toward selective opportunity.

Looking ahead, investors will be watching closely to see whether this strong start to February can be sustained. Key factors to monitor include follow-through buying in mid-cap and banking stocks, the durability of value leadership, and bond market behavior for early signs of renewed caution. Opportunities may emerge if broad participation continues and indices hold above reclaimed resistance levels, particularly in sectors that were oversold during January’s volatility. Risks would rise if momentum fades quickly or external market pressures re-emerge. The coming sessions should clarify whether this rally marks the beginning of a more durable February trend or an initial burst of optimism following a volatile month-end reset.