"Business As Usual": Nilesh Shah Explains Why Israeli Markets Are Surging Amid Israel-Iran War

At a time when missiles are flying over the Middle East and fears of a wider conflict loom large, the Israeli stock market is doing the unthinkable: rallying to all-time highs. According to media reports, the Tel Aviv Stock Market went up by 4 per cent on Thursday, hitting a 52-week high. 

What’s fueling this market resilience in the face of a potentially destabilizing war? In an exclusive interview with Republic, Nilesh Shah, Managing Director, Kotak Mahindra AMC, offered a grounded perspective. According to him, the Israeli market surge reflects investor confidence in the country’s ability to navigate and contain the crisis.

"Not an expert on the Tel Aviv market, but probably it shows the confidence of Israeli citizens and investors that they will be able to come ahead of this situation. The message they’ve delivered to the world is that it’s business as usual," Shah told Republic Media Network. 

Shah drew a sharp comparison to India’s own wartime market behavior during the Kargil conflict of 1999. "Ahead of the Kargil War, Indian markets corrected by about 15 per cent. But once it became clear that the conflict would be limited and India wouldn’t cross the international border or Line of Control, the market recovered quickly," he said.

"In fact, throughout the two months of war, our markets kept climbing up. People looked through the smoke screen and assessed the extent of damage. If they feel confident that this will remain a limited war, investors continue to invest," Shah explained.

His comments come as the Israel-Iran conflict raises fears over global oil supply disruptions, especially if tensions escalate near the Strait of Hormuz. But despite these macro risks, Israeli investors seem to be pricing in limited economic fallout, at least for now.

Shah’s analysis highlights a deeper truth about markets: they don’t just react to war headlines; they react to the perceived duration, scale, and containment of conflict. 

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