Israel's stock market defies Middle East tensions to hit new highs

Israel has recorded the highest stock market performance in the Middle East in years. The country has also encountered significant economic growth. 

Notably, all this takes place during a deadly war in the country that commenced on October 7, 2023, and has lasted for 22 months now.

Despite these challenges, the country’s economic status continues to record impressive results amid growing foreign investments as investors’ confidence rises after a 12-day clash with Iran.

Israel’s economy thrives in the face of a devastating war

Israel’s Tel Aviv Stock Exchange (TASE) shows desirable outcomes after the country faced a significant drop of approximately 23% in its stock market just after it declared war in October, and also during the Hamas attack.

Interestingly, the results were the highest ever achieved, exceeding levels recorded before the war began. To support this claim, analysis from sources dated July 17 reveals that TASE soared more than 200% compared with the outcome released in October 2023. 

In 2023, Israel’s Gross Domestic Product (GDP) decreased by around 20% due to reduced investments and consumer spending in the face of the devastating war. 

However, in 2024, the outcome started taking an impressive turn, recording a 2% moderate growth and GDP growth of 1%. The government had increased its spending, playing a crucial role in this growth. Following this tremendous success, the OECD has anticipated a 4.9% economic boom in the country in 2026.

Another significant achievement Israel experienced in 2024 was 161,000 new trading accounts created in the country’s capital market, based on a report released on the Tel Aviv Stock Exchange website this month. These trading accounts were triple the number of accounts opened in 2023.

TASE reports also highlighted that 87,000 new trading accounts were opened in 2025.  About 33,000 of them were located in investment companies.

The only way to go was up for Israel after disruptions 

In the report, Hadar Romano, a Data & Information Services Manager at TASE, stated that 2023 came with several uncertainties. She then highlighted that by 2024, they noticed some changes, which included more people getting involved in the capital market. 

Romano added that the individuals opened trading accounts while considering the low prices displayed in TASE’s indices. Based on her argument, these enabled them to access the local capital market easily, and are also the factor that drove trading volumes to high levels.

Avi Hasson, Startup Nation Central CEO in Israel, commented on the situation. He highlighted several factors behind the increased market sentiment in the country.

According to Hasson, global investors have shifted their focus to Israel following the events in the past 22 months. They speculated that the risks around the country’s security and economy had reduced, he explained.

Hasson emphasizes the role of the tech sector in Israel’s economy 

With these positive outcomes in its economy, Israel has undermined its enemy’s strength, mostly Hezbollah in Lebanon. US intervention heavily swayed the balance of power in the Israel-Iran conflict.

Hasson noted that Israel’s tech market, employing various energy skills, its increasing population, and new startups have attracted international investors and firms. He continued that they considered the Middle East’s future, not the current situation.

The CEO emphasized Israel’s technology sector as the main factor behind its economic success. He highlighted that around 20% of Israel’s GDP and 56% of its exports come from advanced tech goods and services. The country’s government support for experimentation and development has been the primary factor behind this achievement.

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