Vietnam Insight

US futures rise after two-week decline, Nikkei 225 falls 0.34% to 62,693, European stocks end the week lower, crude oil near $102/barrel. US stock futures moved higher on Monday after the major indexes posted losses for a second consecutive week, pressured by growing concerns over artificial intelligence spending and rising oil prices. Investors turned their attention to the Federal Reserve’s policy decision this week, with the central bank widely expected to leave interest rates unchanged before potentially raising them in December. Central banks in the Eurozone and Japan are likewise anticipated to keep rates steady. On the corporate front, investors are preparing for earnings reports from major technology companies, including Amazon, Alphabet, Microsoft and Intel, alongside other prominent firms such as Visa, Coca-Cola, Boeing, Eli Lilly and Exxon Mobil. Meanwhile, market participants continued to monitor geopolitical developments in the Middle East amid concerns that the US could resume military strikes against Iran following the November 3 midterm elections. Japan’s Nikkei 225 Index fell as much as 2.3% before recovering to close 0.34% lower at 62,693 on Friday, as selling pressure in technology and artificial intelligence stocks began to ease. European stocks extended losses on Friday, with the Stoxx 50 falling around 0.5% to a more than four-month low and recording a weekly decline of over 2%. Crude oil fell toward $102 per barrel on Monday, retreating from recent highs despite fears that strikes against Iran could resume following this week’s Israeli elections and next week’s US midterm elections.

Short-term recovery. The market ended the week at 1,774.1 points (+68 points, +4%) on the weekly chart with markedly improved liquidity, led mainly by the VIC, VHM and VPL group. Overall, most sectors rose and breadth improved. The index is approaching the MA50 and is expected to head toward the 1,800–1,840 zone; however, short-term profit-taking pressure will appear, especially as the market has risen for 3 consecutive sessions. Support and resistance are 1,660 and 1,800 respectively.

Trading strategy: Investors should treat the headline index only as a reference while the market is heavily driven by the Vingroup group. In the short term, caution is still warranted, but opportunities remain in several groups attracting capital, such as exporters, real estate, industrial-park real estate and retail. Risk-averse investors should favour low-beta, high-dividend, low-debt names.