Vietnam Insight

Under pressure from the sell-off in technology stocks and rising oil prices. US stock futures edged lower on Wednesday after the major averages declined in the previous session amid heavy selling in semiconductor and other technology stocks. Rising global bond yields and firmer oil prices also dampened sentiment, with the 30-year Treasury yield reaching a 19-year high this week. On the geopolitical front, the US and Iran showed little indication of reaching an agreement to end the conflict and reopen the Strait of Hormuz in the near term. In regular trading on Tuesday, the Dow fell 0.22%, the S&P 500 declined 0.69% and the Nasdaq Composite plunged 1.33%, with all three benchmarks losing ground for a third consecutive session. AI-linked chipmakers suffered steep losses, including Micron (-7%), Sandisk (-9%), Nvidia (-2.3%), Intel (-6.6%) and AMD (-4.3%). Investors now await minutes from the Federal Reserve’s July meeting, along with earnings reports from major retailers including Target, TJX and Lowe’s.

Range-Bound trading with resistance at 1,800. VN-Index ended the session at 1,732.02 points, up 4.56 points (+0.26%), with trading volume below the 20-session average. 129 stocks advanced, while 167 declined. VIC, GAS, and VHM were the top positive contributors to the index, while TCB, LPB, and VCB weighed on performance. Foreign investors recorded net selling of nearly VND767 billion, mainly concentrated in VIC, VPB, and SSI.

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: MBB, POW; Watchlist: HPG, REE, NVL

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