The Israeli capital market opened on June 16, 2025, with somewhat surprising gains, despite the complex security situation and ongoing attacks from Iran. While investors await further trends in global markets, the local exchange appears to be resilient, particularly in specific sectors. The question that arises is whether this is based on optimism or a direct economic reaction to the consequences of the current conflict.

Key Index Data and the Leading Role of Construction Stocks

The TA-125 Index, which comprises the 125 largest and most traded companies on the Tel Aviv Stock Exchange, rose by 1.2%, while the TA-35 Index, consisting of the 35 highest market-cap stocks, climbed by 0.8%. The Tel Aviv Banks Index also showed a gain of 1.3%, indicating a certain stability in the financial system. However, the most striking figure today is the surge in the Construction Index, which recorded a dramatic increase of 5.6%. This sector stands out exceptionally, with construction companies such as Aura jumping by 7.2% and Inrom surging by 9.6%. Other stocks in the sector, like Shikun & Binui, added 7.7% to their value, Israel Canada leaped by 6%, and Acrstain rose by 6.1%.

The sharp rise in construction stocks, particularly against the backdrop of extensive damage to Israeli buildings from Iranian missile attacks, suggests that the market is already pricing in the future need for reconstruction. Under normal circumstances, security events with destructive impacts on infrastructure would be expected to lead to declines in stock prices. However, in this case, investors appear to identify significant business potential in the medium and long term. It is possible that the market is pricing in anticipated government and private investments in construction and rehabilitation, which provides a tailwind for companies operating in this field.