The Tel Aviv Stock Exchange opened Thursday’s session under broad-based pressure, with most major indices trading lower in early hours. The market tone reflects cautious positioning by investors, as global macro uncertainty, interest-rate sensitivity, and selective capital allocation continue to shape risk appetite across equity and bond markets.

Broad Index Weakness Reflects Risk-Off Positioning

At the open, the TA-35 index slipped 0.10% to 4,035.04 points, reflecting mixed performance among Israel’s largest listed companies. Market breadth remained relatively balanced, with 16 advancing stocks, 14 decliners, and 5 unchanged, indicating selective rather than panic-driven selling. In contrast, the TA-90 showed more pronounced weakness, falling 0.68% to 3,984.17 points, highlighting pressure in mid-cap and growth-oriented stocks that are more sensitive to liquidity conditions and valuation risk.

The TA-125 declined 0.24% to 4,017.45 points, while the TA-90 and Banks index fell 0.28% to 4,182.31 points, signaling a combination of financial sector pressure and broader equity softness. The TA-125 Value index dropped 0.50%, suggesting that even traditionally defensive value segments are not fully insulated from current market volatility. Sector-based indices such as the TA Sector-Balance index also weakened by 0.56%, reinforcing the picture of market-wide risk reduction rather than isolated sector rotation.

Trading Volumes and Liquidity Trends

Equity market turnover reached approximately NIS 291 million in early trading, with trading activity concentrated primarily in large-cap stocks and core indices. This pattern typically reflects institutional repositioning rather than retail-driven flows, suggesting portfolio adjustments rather than speculative trading behavior. Liquidity distribution indicates a preference for high-quality, liquid assets while reducing exposure to higher-beta names.

In the bond market, turnover stood at roughly NIS 24.8 million, with mixed performance across fixed-income indices. The All-Bond General index edged up 0.02%, while short-duration bonds such as the short-term bond index up to one year remained flat. Inflation-linked bond indices showed marginal moves, reflecting stability in fixed-income positioning despite equity market pressure. This divergence between equities and bonds points to a cautious asset allocation approach, where investors maintain bond exposure as a stabilizing portfolio anchor amid equity volatility.

Macro Signals and Global Context

The current market structure reflects broader global dynamics, where financial markets are increasingly driven by macro signals rather than company-specific fundamentals alone. Rising sensitivity to interest-rate expectations, global liquidity conditions, and geopolitical risk continues to shape investor behavior. Israeli equities, particularly in technology, finance, and industrial sectors, remain tightly correlated with global capital flows and international market sentiment.

For global investors, the Tel Aviv market continues to function as both a regional growth market and a proxy for global tech and innovation exposure. Weakness in mid-cap and growth indices suggests pressure on risk assets linked to future earnings growth and long-duration valuations. At the same time, relative stability in bond markets highlights ongoing demand for capital preservation strategies and defensive positioning.

Outlook: What Investors Are Watching Next

Looking ahead, market participants will closely monitor macroeconomic data, central bank policy signals, and global risk indicators as key drivers of near-term direction. Continued pressure on growth indices could signal further de-risking if global liquidity tightens or risk sentiment deteriorates. Conversely, stabilization in large-cap indices and bond markets may provide a foundation for selective reallocation into high-quality equities.

Key factors to watch include trading volume trends, sector rotation patterns, interest-rate expectations, and cross-market correlations between Israeli equities and global indices. For sophisticated investors, the current environment emphasizes disciplined portfolio construction, liquidity management, and macro awareness. The balance between defensive positioning and selective opportunity-seeking is likely to define market behavior in the coming sessions, as investors navigate an environment shaped by both structural economic shifts and short-term financial uncertainty.