Vietnam Insight

Oil prices surged, triggering a broad sell-off across markets. US stock futures dropped sharply on Monday as oil surged past $100 a barrel amid the escalating Middle East conflict, raising concerns that higher energy costs could slow growth and reignite inflation. Dow and S&P 500 futures fell 1.3% and 1.6%, respectively, while Nasdaq 100 futures dropped 2%. With the Iran war entering its second week and oil shipments effectively blocked through the Strait of Hormuz, several Middle Eastern producers, including Kuwait, Iran, and the UAE, have cut crude output as available storage nears capacity. Wall Street was already pressured last week after weaker-than-expected payrolls data stoked inflation concerns linked to the conflict. The Dow finished last week 3% lower, the S&P 500 fell 2%, and the Nasdaq dropped 1.2%. Investors now turn to this week’s CPI and PCE inflation readings for directional cues, along with earnings from Oracle, Adobe, and Hewlett Packard Enterprise, among others.

Short term downtrend. The VN-Index closed at 1,767.84 (down 40.67 points, or 2.25%), with liquidity remaining consistent with the 20-day average. The market saw 88 gainers against 237 losers. The stock groups exerting the most downward pressure on the index were GAS, VIC, and GVR; conversely, BSR, DCM, and VPL were the primary drivers of the index's gains. Foreign investors registered a net selling of 1,306 billion VND, with a focus on FPT, SSI, and VIC.

Trading Strategy: Short-term investors should prioritize staying on the sidelines given the unpredictable risks from geopolitical tensions. For medium-term positions accumulated at low prices, investors may continue holding exposure to sectors such as steel and banking but with moderate stock allocation.