Global stocks in the red
(Baonghean) - The financial market in the week of October 8-12, 2018 witnessed a sharp decline when most major indices were in red with a strong downward impact from the US market.
The jobs report sent long-term bond yields soaring, with the 10-year Treasury yield hitting 3.248%. That weighed on U.S. stocks, which were hovering near record highs, and raised concerns about valuations as the quarterly earnings season gets underway.
In addition, the market situation became more negative when the IMF released a report lowering global economic growth, making investors more worried, putting pressure on foreign capital flows, causing net selling by foreign investors in almost all emerging and frontier markets, and only maintaining net buying momentum in the Japanese market.
The Dow Jones and S&P 500 indexes closed the week down 4.33% and 4.07%, respectively. European and Asian markets also recorded a sharp decline this week, with major regional indexes all recording a 3-4% drop compared to the first session of the week, amid rising global bond yields and concerns that US-China trade tensions have not shown signs of easing.
In the general development of the international market, domestic stocks also had a sharp decline week when VNIndex decreased by more than 2.61% during the week, while HNXIndex had a sharp decline of more than 4.04%. However, the transaction value decreased slightly compared to the previous week with an average liquidity of more than 6,686 billion VND/session. Foreign investors net sold 568 billion VND last week, following the wave of capital withdrawal from the bond market and stock markets.
Currently the overall picture in the world is still pessimistic but Securities CompanyVNDIRECTbelieves that the Vietnamese stock market will continue to be stronger thanks to the following factors: (1) stable macro economy, (2) The US-China trade war is forecast to bring many advantages to Vietnam. However, the cash flow will continue to be diversified, focusing on a group of leading stocks and it is difficult to spread to the entire market. Ms. Nguyen Phan Cam Thuy, Senior Investment Consultant, Securities CompanyVNDIRECTadvises to continue prioritizing portfolio risk management and reducing margin. The buying strategy still prioritizes selecting stocks with good fundamentals and clear growth stories.
