Most domestic securities companies consider the US and Israel's airstrikes on Iran, launched on the morning of 28/2, a "short-term risk" for the VN-Index. This assessment is based on the Vietnamese stock market's representative index, which has historically shown negative movements during similar past events.
According to VnExpress statistics, over the past four years, the stock market has experienced seven fluctuations linked to military conflicts in Ukraine, the Middle East, and Venezuela.
Among these events, the VN-Index declined three times immediately following an escalation of geopolitical tensions. The first instance was in late 2/2022, when Russia's military operation in Ukraine caused the index to drop by nearly 1,2%. More than two years later, in mid-4/2024, the index plunged by nearly 5% on the day Iran attacked Israel. Most recently, during yesterday's trading session, the market turned red due to investor caution following the outbreak of conflict, leading to a 2,5% decrease compared to its reference point.
In other instances, such as Hamas's attack on Israel or the US's surprise military operation in Venezuela, the market did not decline immediately. However, the VN-Index tended to fall back over the following two weeks.
According to Nguyen The Minh, Director of the Individual Customer Research and Development Division at Yuanta Vietnam Securities Company, all military conflicts negatively impact the market in the short term (a few days to a few weeks) before gradually diminishing.
Sharing this view, Tran Hoang Son, Market Strategy Director at VPBankS, noted that short-term fluctuations are typically declines driven by concerns over rising oil prices, inflationary pressure, and prolonged geopolitical risks. However, compared to global stock indices, the VN-Index tends to be less directly affected due to its smaller scale and investors' greater focus on internal factors.
Specifically, Middle East events often cause US stock indices like the S&P 500, Nasdaq, and Dow Jones to lose 1-2%. Domestically, adjustments are typically below 1%, with the exception of the sharpest decline of approximately 5% in mid-4/2024 when Iran attacked Israel. Moreover, that particular decline was not solely due to this event but also influenced by exchange rate pressure and net selling by foreign investors.
Analysis groups also observe a common trend: during military conflicts, oil and gas, chemical, and shipping stocks often move against the index. This holds true for both domestic and global stock markets. For example, in yesterday's trading session, all domestic oil and gas stocks, from large to small capitalization, including GAS, PLX, BSR, OIL, POW, and PVD, hit their ceiling prices with no sellers. Some stocks recorded buy orders exceeding 10 million units.
An expert from ACB Securities Company explains that these sectors receive a short-term boost from expectations of rising oil and freight prices due to geopolitical instability. However, the medium-term impact remains uncertain.
"In the oil and gas sector, only upstream companies truly benefit when crude oil prices rise sharply and prolong the cycle due to increased global supply control. The medium-term increase in oil prices also depends on consumption demand and production activities," the ACBS analysis group wrote in a report published yesterday.
The VN-Index is experiencing its second consecutive declining session since tensions between the US - Israel and Iran escalated. However, Tran Hoang Son expects this correction to be minor and to recover quickly if the conflict does not prolong and does not severely impact global oil supply.
"If oil prices stabilize quickly thanks to OPEC's response, the VN-Index could consolidate and resume its uptrend," he said.
From a technical perspective, the VN-Index is currently facing a resistance zone at 1,900-1,920 points, where liquidity often exceeds 42,000 billion VND per session. Therefore, strong fluctuations are considered inevitable to build momentum for the market to continue its upward trajectory.
Phuong Dong
