Vietnam Insight

Oil prices surged amid US-Iran uncertainty. US stock futures were little changed on Tuesday after the major averages started the week on a sour note, as persistent uncertainty over a US-Iran deal and expectations for tighter monetary policy weighed on sentiment. In regular trading on Monday, the Dow fell 0.11%, while the S&P 500 and Nasdaq Composite declined 0.06% and 0.32%, respectively. Oil prices rallied sharply as uncertainty surrounding the Middle East conflict continued to weigh on markets, pushing Treasury yields higher and raising concerns that the Federal Reserve may need to raise interest rates soon despite signs of a cooling labor market. Investors now await key inflation data due this week for further clues on the monetary policy outlook. On the corporate front, earnings are due today from Cardinal Health, CoreWeave and Super Micro Computer, among others.

Range-Bound Trading with Resistance at 1,800. The VN-Index closed the trading session at 1,776.77 points (+8.71 points, +0.49%), with trading volume hovering around the 20-day average. During the session, 245 stocks advanced while 88 declined. Stocks exerting a positive influence on the index included GAS, TCB, and GVR, whereas VIC, VHM, and LPB weighed on the index. Foreign investors were net sellers to the tune of nearly VND282 billion; they focused their buying on DMX, SHB, and VNM, while net selling TCB, VHM, and FPT.

Trading Strategy: Investors may take advantage of market pullbacks to gradually accumulate positions while maintaining a prudent cash allocation to manage risk and preserve flexibility to increase exposure once a market recovery is confirmed. Investors should avoid using margin to bottom-fish, as the market may still be in the process of forming a second bottom. In addition, technical rebound sessions provide an opportunity to rebalance portfolios by reducing exposure to companies whose business performance has fallen short of expectations.

Current portfolio: LPB, PAN, MBB, POW; Watchlist: HPG, REE, NVL

High-risk stocks to avoid: Real estate (PDR, KDH, NLG), HDG and PNJ