Israel's stock market outperforms Middle East counterparts despite multi-front wars

Israel's banal marketplace is astatine a grounds precocious and has seen the top gains of immoderate state successful the Middle East implicit the 22 months of warfare that began connected Oct. 7, 2023. 

Israel has been waging multi-front wars, sustaining the mobilization of hundreds of thousands of troops that would ordinarily beryllium portion of the workforce, it's presently facing charges of warfare crimes successful planetary courts, each portion grappling with a ample protestation question and governmental turmoil astatine home. Despite this, its economical scenery remains buoyant – lifted by important overseas concern and much precocious by renewed capitalist assurance pursuing its 12-day struggle with Iran. 

Initially dropping arsenic overmuch arsenic 23% successful the period pursuing the October Hamas onslaught and Israel's declaration of war, the Tel Aviv Stock Exchange had rebounded to and exceeded pre-war levels by the archetypal 4th of 2024. As of July 17, the TASE is up implicit 200% from its Oct. 2023 low. 

The country's GDP for the past 4th of 2023 shrank astir 20%, pursuing a heavy contraction successful backstage depletion and concern triggered by the war. The afloat twelvemonth nevertheless finished with humble maturation of 2%, and a further 1% GDP maturation successful 2024, driven chiefly by authorities spending. In June of this year, the OECD forecast 4.9% growth successful economical enactment for Israel successful 2026.

"In 2024, astir 161,000 caller trading accounts were opened successful the Israeli superior market," a July report published connected the Tel Aviv Stock Exchange website stated. That fig represents a threefold leap successful the fig of accounts opened compared to 2023.

The study added that the archetypal fractional of 2025 saw a further 87,000 caller trading accounts opened, immoderate 33,000 of which were successful concern houses.

"The twelvemonth 2023 was characterized by sizeable uncertainty… However, already successful 2024, a reversal of the inclination could beryllium identified: the nationalist expanded its engagement successful the superior market, opened trading accounts, and took vantage of the debased terms levels successful TASE's indices to participate the section superior market, which besides supported the precocious trading volumes," Hadar Romano, caput of information astatine TASE, wrote successful the report. 

Avi Hasson, CEO of Israel's Startup Nation Central, credited a fig of factors for boosting capitalist assurance successful Israel.  

"As a effect of what has been happening successful the past 22 months, planetary investors look astatine the Middle East now, and specifically astatine Israel, and say… 'The risks confronting Israel's information and system are really going down'," Hasson told CNBC's Access Middle East. 

In the past year, Israel has managed to importantly degrade the capabilities of its adversaries, peculiarly Lebanon's Hezbollah, and its June struggle with Iran – with the assistance of the U.S. – was wide seen arsenic having dealt a important stroke to Tehran's abilities to harm the Jewish state.   

When investors "try to look astatine the fundamentals of the Israeli economy, and much specifically, the tech market, its dynamism, its capabilities, the babe boom, caller institution creation," Hasson said, "global investors and planetary companies are taking notice, erstwhile they effort to ideate the Middle East. Not needfully however it is today, but alternatively successful the months and years to come."

Israel's tech assemblage is to convey for overmuch of the country's economical success. High-tech products and services marque up 20% of Israel's GDP and 56% of its planetary exports, Hasson said, acknowledgment successful portion to the authorities investing heavy into probe and development.

Since the commencement of the war, its defence assemblage has gained further attraction from overseas countries, adjacent successful the Arab satellite – 1 disposable illustration being the robust beingness of Israeli defence firms astatine Abu Dhabi's IDEX defence exhibition successful February of this year.

Foreign concern has besides played a large portion successful the boost to Israel's banal marketplace and existent property sector.

In May of this twelvemonth alone, overseas investors bought astir 2.5 cardinal shekels ($743 million) successful TASE shares, according to Israeli quality outlet Ynet. Since the commencement of 2025, it reported, full overseas acquisitions person reached astir 9.1 cardinal shekels, oregon $2.7 billion.

And according to Israel's cardinal bank, outstanding liabilities to overseas investors "increased by astir $27.5 cardinal (about 5.2 percent) successful the 4th quarter, to astir $554 cardinal astatine the extremity of the quarter." That increase, the slope said, "was chiefly owed to a operation of an summation successful the prices of Israeli securities held by nonresidents and the continued travel of nett investments successful Israel by nonresidents."

The Israeli shekel, meanwhile, has gained astir 7% against the U.S. dollar pursuing the Israel-Iran struggle successful June, portion S&P Global Market Intelligence expects terms ostentation successful the state to autumn wrong the cardinal bank's people complaint by the 3rd 4th 2025, apt paving the mode for further monetary easing.