Israeli markets closed higher on Tuesday, December 16, marking a clear rebound from the prior session’s pullback. Investor sentiment improved noticeably as buying returned across equities, led by mid-cap and banking stocks, while fixed-income markets also strengthened. The session reflected renewed confidence following recent consolidation, with capital flowing back into risk assets amid steady global conditions.

TA-35 Posts Measured Gains as Blue Chips Regain Footing

The TA-35 index advanced 0.33% to 3,607.33 points, supported by a healthy improvement in market breadth. Advancing stocks outnumbered decliners 22 to 10, with three issues unchanged, signaling a return of selective buying interest among Israel’s largest companies. Trading turnover exceeded ₪2.07 billion, highlighting sustained institutional participation.

Large-cap performance suggested stabilization rather than aggressive risk-taking. Investors appeared to rotate back into high-quality names that had seen pressure in the previous session, particularly within financials, infrastructure, and defensive industrials. The rebound indicates confidence that the recent weakness was corrective rather than the start of a deeper downtrend.

While gains were moderate, the TA-35’s recovery provided an important anchor for broader market sentiment.

Mid-Caps and Banks Lead the Upside as Risk Appetite Improves

The strongest performance of the session came from mid-cap stocks. The TA-90 jumped 1.47% to 3,730.56, with an impressive 74 advancing stocks against just 14 decliners. This sharp improvement in breadth points to a decisive shift in investor appetite toward domestically exposed companies after recent risk reduction.

The TA-90 & Banks index also delivered a solid 0.84% gain, underpinned by strong participation across the financial sector. Banking stocks benefited from renewed confidence in credit conditions and balance-sheet resilience, as well as broader optimism tied to market liquidity and capital flows. With 78 advancers versus 15 decliners, the move reflected conviction rather than short covering.

The broader TA-125 rose 0.58%, supported by 96 advancing stocks. The TA-125 Value Index gained 0.60%, showing that value-oriented equities participated fully in the rebound. The TA Sector-Balance index climbed 1.03%, confirming that strength was distributed across multiple industries rather than concentrated in a single theme.

Bond Market Strengthens as Investors Rebuild Balanced Exposure

Fixed-income markets complemented the equity rebound with broad gains. The All-Bond General Index rose 0.06%, supported by 402 advancing securities compared with 105 decliners. This breadth underscores renewed confidence across the bond market, even as investors increased equity exposure.

Short-term bonds edged higher by 0.01%, maintaining their role as a low-volatility anchor within portfolios. Inflation-linked bonds also posted gains, with Tel-Bond Linked A up 0.04% and Tel-Bond 60 Linked rising 0.11%. These moves suggest stable inflation expectations and a balanced approach to duration and price-risk management.

Trading activity remained robust, with bond-market turnover approaching ₪2.88 billion, indicating active repositioning rather than defensive retreat. The parallel strength in equities and bonds points to improving overall market confidence rather than a narrow tactical shift.

Looking Ahead

The strong rebound across equities and bonds suggests that Israeli markets may be regaining upward momentum after last week’s volatility. Investors will be watching global interest-rate signals, upcoming inflation data, and geopolitical developments to determine whether this recovery can extend.
Opportunities may continue to emerge in mid-cap and banking stocks if sentiment remains constructive, while large caps provide stability. Risks remain tied to external market shocks and year-end positioning effects, making market breadth, volume trends, and cross-asset flows critical indicators to monitor in the sessions ahead.