The Tel Aviv Stock Exchange opened up 0.5% on Wednesday, just hours after Prime Minister Benjamin Netanyahu emerged as the apparent victor in the close election.
The gains were interpreted as a show of confidence by investors, who have benefited from Netanyahu's stewardship of the strong economy over the past decade.
Netanyahu secured a clear path to re-election on Wednesday, with religious-rightist parties set to hand him a parliamentary majority despite a close contest against his main centrist challenger, a vote tally showed.
With more than 97% of votes counted, the right-wing Likud party and its allies looked likely to muster control of 65 of the Knesset's 120 seats, paving the way for a historic fifth term for Netanyahu.
The close and often vitriolic contest was widely seen in Israel as a referendum on Netanyahu's character and record in the face of corruption allegations. He faces possible indictment in three cases and has denied wrongdoing in all of them.
Despite that, Netanyahu gained four seats compared to his outgoing coalition government, according to a spreadsheet published by the Central Elections Committee of parties that won enough votes to enter the next parliament.
"It is a night of colossal victory," the 69-year-old Netanyahu told cheering supporters in a late-night speech at Likud headquarters after Tuesday's vote.
"He's a magician," the crowd chanted as fireworks flared and Netanyahu kissed his wife Sara.
His challenger, the new Blue and White center-left bloc headed by former military chief Benny Gantz, claimed a more modest victory after winning a 35-seat tie with Likud. Unless he reverses on campaign pledges to shun Netanyahu Gantz looked destined to lead the opposition.
"The skies may look overcast … but they cannot conceal the sun of hope that we have brought to the Israeli people and society," Gantz, 59, wrote in an open letter to supporters.
Should Netanyahu retain the helm, as is widely expected, he will become the longest-serving Israeli prime minister in July, overtaking the country's founding father, David Ben-Gurion.
An indictment decision would follow a review hearing where Netanyahu can be expected to argue he should be spared, in the national interest. Some political analysts predict he may try to pass a law granting himself immunity, as a sitting leader, from trial.
During the campaign, the rival parties accused each other of corruption, fostering bigotry and being soft on security.
Netanyahu highlighted his close relationship with U.S. President Donald Trump, who delighted Israelis and angered Palestinians by recognizing Jerusalem as Israel's capital in 2017 and moving the U.S. Embassy to the holy city last May.
Two weeks before the election, Trump signed a proclamation, with Netanyahu at his side at the White House, recognizing Israeli sovereignty over the Golan Heights.
