- November 28, 2025
- 9:35 pm
- Israel
Negotiations on a possible agreement between Ukraine and Russia, as well as discussions on ending the war in Gaza, unexpectedly hit the Israeli defense sector. It was these peace signals that caused the shares of companies, which had been stock market stars for three years, to suddenly lose positions.
New Index, Big Expectations
In November, a new index ת”א-ביטחוניות began operating on the Tel Aviv Stock Exchange, bringing together about 20 leading companies from the security and defense technology sector. It included players such as Elbit Systems, Next Vision, manufacturers of UAVs, sensors, surveillance systems, and military electronics.
The launch of the index was presented as an important step for the Israeli market: the defense industry had shown record profitability in recent years, technology exports were growing, and demand was increasing due to the war of the Russian Federation against Ukraine and threats from Iran.
Why the Index Immediately Went Down
But instead of the expected growth, there was a drop of 4–5%.
The reason — geopolitical signals:
Peace negotiations Ukraine–Russia led some investors to assume a slowdown in demand for weapons.
Discussion of ending the war in Gaza also created the feeling that the “peak demand period” might end.
Shares that had been rising like stars for three years came under pressure in the first weeks of the new index’s operation.
The market switched from “war psychology” to pragmatism: investors demand confirmed contracts, not just expectations.
Why This Is Important Not Only for Israel
Analysts warn:
if Europe truly believes in “peace on Russia’s terms,” it will create an economic black hole into which the EU will spend resources for decades.
For Israel, this means a possible decrease in global defense demand.
For Ukraine, the risk of getting an unstable peace that will only strengthen Russia and undermine regional security.
But the Sector Remains Strategic
Despite the decline, experts agree: the foundation of the industry remains strong.
Defense budgets in the US and Europe are growing.
Israel continues to expand exports of air defense, intelligence, and drone technologies.
Contracts for years ahead can bring the sector back to growth even with temporary cooling.
The drop today is not a crisis of the industry, but a correction after three years of overheating.
Why Investors Are Watching This Especially Closely
The defense industry is one of the pillars of the Israeli economy.
The dynamics of the ת”א-ביטחוניות index give a signal:
how much the world truly believes in the cessation of wars;
how stable expectations regarding Ukraine are;
and whether the West is ready to slow down military programs.
So far, the market says: “we are not sure.”
In a world where every attempt at “peace negotiations” changes the balance of power, the defense sector remains a litmus test of international security. The fall of the index is yet another sign of how fragile global forecasts remain.
NAnews — News of Israel | Nikk.Agency
