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Tel Aviv Equities and Shekel Firm as Rate Signals Diverge

Local markets lean on telecom gains and export currency flows ahead of the Bank of Israel's September policy decision.

Signalpoint TeamBrief

Markets

High-tech export conversions continue to anchor shekel strength — giving the Bank of Israel room to evaluate rate cuts without risking currency devaluation.

BackgroundThe shekel has demonstrated structural resilience against major currencies, supported by current account surpluses from technology and defense exports. The Bank of Israel has maintained its benchmark interest rate at 3.5% to balance inflation management against wartime fiscal demands.

Points
  1. USD/ILS traded near ₪2.985 while EUR/ILS held around ₪3.49, reflecting sustained foreign exchange strength that limits imported inflation pressure.
  2. Bank of Israel Governor Amir Yaron confirmed the central bank's early September rate decision remains open, weighing persistent service inflation against economic growth.
  3. Market strategists noted that structural foreign currency conversions by Israeli exporters continue to apply persistent upward pressure on the shekel.
  4. The strong currency helps cushion domestic consumers from rising imported commodity and crude oil costs, stabilizing household purchasing power.
SourcesCTech: The forces pushing the shekel higher are bigger than the dollar (opens in new tab)Investing.com: Bank of Israel governor says next rate decision is live (opens in new tab)

Markets

Institutions are shifting funds into high-dividend telecom and chemical shares — insulating Tel Aviv benchmarks from global tech volatility and monetary policy uncertainty.

BackgroundThe Tel Aviv exchange has navigated regional war risks through persistent corporate earnings resilience and foreign capital inflows into local defense and tech suppliers. The TA-35 benchmark tracks Israel's largest public corporations listed in Tel Aviv.

Points
  1. The TA-35 index closed up 0.39% on Friday, capping a week marked by sector rotation between domestic banks and technology exporters.
  2. Bezeq Telecommunications (+3.50%) and ICL Israel Chemicals (+3.30%) led benchmark gainers, offsetting declines in Delek Group (-1.87%) to preserve weekly index advances.
  3. Local semiconductor vendors Nova (+2.39%) and Camtek (+0.98%) rebounded during Thursday's trading session, helping stabilize overall technology sector valuations.
  4. Trading volume remained elevated across major banking counters as market participants evaluated central bank rate signals, keeping financial sector liquidity high.
SourcesInvesting.com: Israel stocks higher at close of trade; TA 35 up 0.39% (opens in new tab)Globes: Thu: Banking Index down, Tech Index up (opens in new tab)

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