Vietnam Insight

The US Federal Reserve (Fed) keeps interest rates unchanged although two policymakers favor a further 25-basis-point increase. US stock futures declined on Thursday following disappointing earnings from Alphabet, reigniting concerns over the substantial costs of artificial intelligence investments. Nasdaq 100 futures fell more than 1%, while S&P 500 futures slipped 0.5%. During Wednesday’s regular session, the Dow gained 0.19%, the S&P 500 advanced 0.28%, and the Nasdaq Composite climbed 0.27%. The gains came after the Federal Reserve kept interest rates unchanged, despite two policymakers dissenting in favor of a 25-basis-point rate increase. Fed Chair Kevin Warsh expressed confidence that inflation expectations remained well anchored. The Nikkei 225 Index climbed 1.08% to close at 63,954 on Wednesday, rising for the second straight session and tracking gains on Wall Street as strong results from technology companies further boosted sentiment toward the artificial intelligence sector. European stocks were broadly flat on Wednesday, with the Euro Stoxx 50 and Stoxx 600 little changed as gains in Germany and Italy offset a decline of more than 1% in Spain following a rail crash that killed 68 people. UK and French markets were also subdued. Crude oil prices slipped to around $102 per barrel on Thursday, trimming gains from the previous session as investors assessed renewed diplomatic efforts to prevent further escalation of the Middle East conflict. Reports suggested that US Vice President JD Vance had contacted Iranian national security official Mohsen Rezaei, while President Donald Trump confirmed that negotiations were underway through mediators but acknowledged uncertainty over their outcome.

Sideways consolidation. The market continues to diverge sharply as large-cap stocks rise and fall in turn. It is moving in a narrow range on low liquidity, showing an equilibrium zone around 1,750 - 1,800. The main trend remains sideways. Support and resistance are 1,700 - 1,860 respectively.

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

Buy Recommendation: TCH VCG. Portfolios: Current holding TNG, MWG · Watchlist TCH, HPG, IDC · High-risk names to avoid NVL, PNJ, FPT