Global stocks sink in fear and tension

Market volatility is likely to continue as the VIX index remains high. The US 10-year government bond yield continues to rise, while the USD index recovers to its highest level of the week, which are factors that make investors panic and worry. In addition, the gradually announced Q3 business results reports that are not as expected have not been able to support the current market decline. At the end of the trading week, the Dow Jones Index and S&P 500 recorded a decrease of 2.48% and 3.53%, respectively. The main indices of the European market such as DAX, CAC40 or FTSE100 Index are under the same downward pressure, but the decrease is not as much as the US market and Asian stock indexes.

Last week, Asian stocks were under the strongest downward pressure with negative news from the two largest markets in the region, China and Japan. The two main indices, Nikkie 225 and Hangseng Index, recorded the strongest declines of 6.32% and 5.49% respectively during the week. The Shanghai Index closed the week down 2.11%, recovering slightly as the country's financial officials had to make statements and moves to calm the growing panic of investors. The US-China trade tensions, the slowing growth of the economy, and concerns about possible devaluation of the Chinese Yuan (CNY) are putting great pressure on the country's financial sector.

Vietnam's stock market was among the markets that fell sharply, with the VnIndex and HNX Index both falling more than 5.3% this week, the third consecutive week of decline after the market approached 1,025 points.

Market liquidity remains low with the average trading value of the entire market recording more than VND4,751 billion/session. Investors' concerns are leading to foreign investors withdrawing capital from markets, most affected by emerging and frontier markets, which have seen a week of strong net withdrawals.

In the derivatives market, VN30F1811 futures contract traded at a peak with 782,190 contracts traded due to speculative cash flow expecting the market to continue to fluctuate strongly, the number of open positions (OI) continued to maintain at a level showing confidence in the strong downtrend. Securities companyVNDIRECTComments: In the coming trading week, the market will continue to face downward pressure and large price fluctuations. Futures contract traders should not open new selling positions when the futures contract price is low and has a large difference with VN30.

The short and medium-term picture of the market is getting worse with indices continuing to fall sharply and many large stocks collapsing as more and more stocks are trading below the 200-day MA. Meanwhile, the global financial market is still quite tense as key markets in Asia and Europe continue to find new lows. The USD Index, which measures the strength of the dollar in a basket of international currencies, continues to increase and is approaching the peak of August 2018 around 97 points, putting more pressure on emerging and frontier markets to withdraw capital from foreign investors.

Securities CompanyVNDIRECTThe risk of breaking the July 2018 bottom around 885 points of VNIndex is too high and this will cause the indexes and many stocks to sell off. Opportunities to buy at the bottom will appear when this happens, but the risk level will be very high and only suitable for investors who are quick enough and willing to take risks.

PV