The trading week on the Tel Aviv Stock Exchange (TASE) opened with huge gains, despite the war with Iran and attacks against Hezbollah targets in Lebanon. A similar positive market trend was seen during the previous round of fighting against Iran last June, when TASE indices jumped as the market rallied strongly.
According to estimates, similar to the previous campaign against Iran, those behind the current increases are Israeli independent (retail) investors. These have been a significant anchor in the positive trend on the TASE over the past year, and even more so during the operation in June. Back then, these investors demonstrated significant resilience during the military campaign, while the major players, institutional bodies and foreign investors, have displayed inconsistency over the past year.
Retail investors are the public that invests in the TASE independently through the trading platforms of banks and investment houses. According to a study recently published by the TASE, their average age at the start of trading is 29, and over half of them began investing in the last five years. These are young people, most of whom have not yet experienced a significant collapse in the stock market, hence the concern that some may have received the impression that the market is always rising.
The investors “have matured”
The sharp rises on the TASE during the operation in Iran last June surprised many capital market activists. The leading stock indexes, the Tel Aviv 35 and 90, jumped by about 6% and 12% respectively in eight days. In retrospect, it turned out that those driving the rises were retail investors. TASE data show that during the 12 days of the operation, and in the following month (from the outbreak of the war in mid-June to the end of July), Israeli retail investors bought shares worth NIS 4.8 billion. In the past year, these investors purchased shares on the TASE totaling NIS 14 billion (net). Unlike the other major players in the market (institutional and foreign), private investors purchased shares continuously almost throughout last year.
Meitav Trade CEO Osher Tubul says, “If in the past, in times of war, we were used to retail investors immediately getting stressed and running to sell, and we saw an increase in volatility and a decline in stocks, in recent years investors have matured. Today, the retail investor is actually the one who knows how to take advantage of declines and buys. And when the markets start to rise, they gain confidence and continue to buy with the increases ahead. They understand that usually when there is an increase in uncertainty, in situations like war, the risk is short-term. And if you look at it longer term, you understand that it may become a kind of opportunity.”
IBI Investment House VP retail trading Amit Gurion agrees that retail investors have matured. He says, “They understand that such events are positive for the local market. As long as overall there is military success, and Israel’s risk premium decreases, it is positive for the market, and independent trading investors act accordingly. We saw this last June, when they were not frightened by volatility and enjoyed the increases. Investors in recent years understand that the market is a ‘long-term game.”
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According to Tubul, as well as identifying opportunities, private investors are mainly influenced by the mood around them. “At the beginning of the Iron Swords War, there was a major increase in uncertainty, and we saw strong sales and declines. I think there is a direct connection between our resilience to deal with security situations and the stock market. When security returns and we see that ‘the devil is not terrible,’ then the joy of buying also returns.
“I think this trend will continue going forward. Investors will want to see how the war progresses. Right now it looks good, and an opportunity has been created here to remove threats from us. As long as this continues, retail traders will continue to enter the stock market,” Tubul believes, “and the flow of money will continue, in parallel with the decline in the risk premium.”
“Foreigners see an opportunity”
While local retail investors increased their holdings on the TASE during the Iran operation last June, the trend among foreign investors was the opposite. After distancing themselves from the Israeli market for a long period, which began with the judicial reform in 2023 and continued at the beginning of the war, foreigners returned to buying Israeli stocks. However, in the period after the previous campaign against Iran, they sold shares worth about NIS 2 billion. This trend reversed once again towards the end of 2025, which foreigners ended with (net) purchases of about NIS 4.4 billion.
Some in the market believe that this time foreign investors may act differently. “Foreigners are also experiencing a normalization effect,” says Rami Dror, CEO of Value Advanced Investments. “The first attack (last June) created a certain shock and concerns about what will happen. But I think that just as we have already adapted, foreign investors are also getting used to it and knowing how to read the map and understand that there is more opportunity than risk here.”
According to Dror, even among foreign investors, “There is a certain maturity and understanding that these events create opportunities, and no one wants to miss them. Perhaps the fact that the events occurred over the weekend also gives them time to digest and process the situation.
“Therefore, I think that panic is not expected among foreign investors, but rather the opposite – joining the local investors who are already running and increasing their holdings in the Israeli market.”
What will the institutions do?
The third player operating on the TASE, alongside retail and foreign investors, are the institutional bodies, the managers of savings and investments of the public in Israel. Until and during the operation in Junei, these were a mirror image of the foreign investors.
After the outbreak of the war in October 2023, they bought shares on the TASE, and in the first half of 2025 they sold shares worth about NIS 2 billion. Following the campaign last June, the institutions returned to buying about NIS 1.2 billion, and ended the year with net purchases of about NIS 3.3 billion.
The market estimates that the trend will continue even during the current campaign against Iran, and that institutional investors will not rush to sell even if prices rise. “I don’t see institutional investors reducing their holdings in the Israeli market,” says Dror. “I think that Israel’s risk premium has changed, and the equilibrium formula is changing as a result. If it was worthwhile to be overweight in Israel before, then even more so now. Many of the positive expectations are certainly coming true, and there is still room for increases.
He adds, “What’s more, I don’t see a better alternative right now, for two reasons: First of all, you have to remember that the local investments of the institutional investors are in shekels, so there is a very significant advantage in this given the strengthening of the shekel. Second, I think that no stock exchange in the world is cheap right now, certainly not the US, which is facing very great concerns about AI. The level of multiples in the world is high, and here in Israel there is a positive story that has not yet been exhausted, so I don’t see institutional investors reducing their holdings in Israel right now.”
Published by Globes, Israel business news – en.globes.co.il – on March 3, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
