The Tel Aviv Stock Exchange jumped sharply on Sunday, driven by fresh hopes for a Gaza ceasefire under U.S. President Donald Trump’s 21-point plan. Investors also expect the Bank of Israel to keep interest rates steady, boosting market confidence amid ongoing war uncertainties.
Market Gains Break Records
Stocks in Tel Aviv reached new highs as trading ended on Sunday. The benchmark TA-125 index climbed 3 percent, erasing earlier losses and marking a 26 percent rise since the year started.
This surge followed details of Trump’s plan, which aims to end the Gaza conflict, free hostages, and rebuild the area. The TA-35 index rose 2.7 percent, its strongest day in nearly two years. Smaller stocks in the TA-90 index gained even more, up 3.9 percent.
Sector leaders included insurance, up 7.3 percent, construction at 6 percent, finance at 5.8 percent, and banks at 4.7 percent. These moves show broad optimism across industries.
Trading volume hit peaks not seen in months, with investors rushing to buy shares. One trader noted the fear of missing out as a key driver.
Ceasefire Talks Fuel Optimism
Hopes for peace in Gaza sparked the rally. Israeli officials see a good chance Trump’s plan will work, including steps to stop fighting and rebuild.
The plan outlines 21 points for lasting peace, such as hostage releases and economic aid for Gaza. This comes after over a year of conflict that hurt Israel’s economy.
Markets reacted fast to Saturday’s news. Shares opened higher and kept climbing as details spread.
Analysts say ending the war could boost growth, lower defense costs, and attract foreign investment. Past ceasefires have led to quick stock rebounds, like after earlier deals.
However, some warn risks remain if talks fail. Tensions with other groups could still disrupt progress.
Steady Rates Expected from Bank of Israel
The Bank of Israel will announce its interest rate decision on Monday. Most experts predict no change, keeping rates at current levels.
Governor Amir Yaron favors caution amid global and local uncertainties. Slowing growth had some hoping for a cut, but inflation worries and war costs point to stability.
Rates have stayed high to fight rising prices, now at about 4.5 percent. A steady decision could support stocks by avoiding shocks.
Recent data shows Israel’s economy grew 4.6 percent last quarter, better than expected. This resilience helps the bank’s choice.
If rates hold, it might signal confidence in recovery, drawing more investors.
Here are key economic indicators influencing the decision:
- Inflation rate: 3.2 percent annually
- GDP growth forecast: 4.6 percent for next year
- Unemployment: 4.1 percent, down from peaks
- Shekel strength: Up 8 percent against the dollar this year
Analyst Views on the Rally
Experts mixed enthusiasm with caution. One investment chief said the market senses big gains if peace holds, especially for real estate and tech.
Another pointed to wartime strength, with Israel’s stocks outperforming many global markets despite conflicts.
A tech reporter noted tech firms led gains, up 4 percent on average. This sector drives much of Israel’s exports.
However, not all agree. Some economists urge watching for setbacks, like renewed fighting or global slowdowns.
They recall past drops, such as a 6 percent fall in 2023 after attacks. Today’s rise shows investor bets on resilience.
| Index | Daily Gain | Year-to-Date Rise |
|---|---|---|
| TA-125 | 3% | 26% |
| TA-35 | 2.7% | 24% |
| TA-90 | 3.9% | 28% |
| Banks | 4.7% | 22% |
| Insurance | 7.3% | 30% |
Broader Impact on Israel’s Economy
The stock surge reflects wider economic hopes. Ending the Gaza war could cut military spending, now over 7 percent of GDP.
Real estate and tourism might rebound, creating jobs. Foreign investment, down during the conflict, could return.
Israel’s shekel strengthened against major currencies, aiding imports. Exports in tech and defense remain strong.
Yet challenges linger. Debt from the war burdens budgets, and global tensions with Iran add risks.
Recent events, like a brief Iran ceasefire in June, briefly lifted stocks 4 percent. This pattern suggests peace drives growth.
What Lies Ahead for Investors
Markets may stay volatile until the rate decision and more ceasefire news. If talks advance, stocks could climb further.
Traders watch U.S. moves, as Trump’s plan ties in American support. Positive updates might push indices to new peaks.
For now, the rally shows faith in Israel’s economy. Investors should track official statements closely.
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