Vietnam Insight

The conflict shows no signs of easing. US stock futures edged lower on Monday as the US-Israeli war with Iran showed no signs of easing, keeping markets under pressure. President Donald Trump threatened to strike major Iranian power plants if the Strait of Hormuz is not reopened to shipping soon, while Tehran warned it would target US and Israeli assets across the region, including energy, information technology and desalination infrastructure, if its energy facilities were hit. Oil prices opened higher before pulling back, though still-elevated levels continued to fuel inflation concerns and dampen expectations for a near-term interest rate cut from the Federal Reserve. Last week, the Dow fell 2.11%, the S&P 500 dropped 1.9% and the Nasdaq Composite lost 2.07%, with all three benchmarks marking a fourth consecutive weekly decline. Investors now turn to flash US PMI data due Tuesday for insight into how businesses are coping with mounting uncertainty.

Short-term correction. The VN-Index closed the week's trading session at 1,648 points (down 48.43 points, or 2.9%, for the week), with lower trading volume compared to the average of the last 20 sessions. 95 stocks gained, while 241 declined on the last trading day of the week. During this session, the stocks exerting the strongest downward pressure on the index were VIC, VCB, and GAS; while VCK, BVH, and REE contributed positively to the index. Foreign investors net sold VND 1,907 billion, notably HPG and VIC, while they heavily bought MCH and VCK.

Trading Strategy: Investors should avoid fully deploying their buying power until there is greater clarity regarding geopolitical developments in Iran. In the meantime, investors may focus on domestically driven sectors such as public investment, banking, and construction materials. Market corrections caused by indirect cross-margin calls could also create opportunities to accumulate stocks at more attractive valuations. Additionally, investors may consider commodity-related stocks as commodity prices appear to be entering an upward trend (e.g., fertilizers). However, these stocks tend to be highly volatile, so proper risk management is necessary if market conditions change