The VN-Index had its second consecutive gain, although selling pressure tended to increase towards the end of the session, causing the increase to narrow significantly. Notably, improved liquidity and the return of net buying by foreign investors were positive signals.
In a statement after the policy meeting on September 18 (local time), the US Federal Reserve (FED) decided to cut interest rates by 0.5%, starting a cycle of easing monetary policy. This information received the attention of many domestic investors, because the Fed's moves always have clear impacts on the financial market in general, and the Vietnamese stock market in particular.
The Fed's interest rate cut often has a major impact on the monetary policy of other central banks around the world, including The State Bank of Vietnam (SBV), especially in orienting interest rates and adjusting monetary tools.
When the Fed lowers interest rates, the USD usually weakens, which can affect the VND/USD exchange rate. With the Fed's interest rate cut, the VND exchange rate tends to increase, leading to pressure on exporting businesses and the overall economy. To deal with this, the SBV will often intervene through measures such as buying foreign currency and increasing foreign exchange reserves to stabilize the exchange rate.
In addition, the Fed's interest rate cut will create space for the State Bank to implement more "loose" monetary policies, without worrying about foreign capital outflows or financial instability.
According to statistics from many interest rate cuts by the Fed, the Vietnamese stock market often tends to grow thanks to the return of foreign capital.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, commented that the Vietnamese stock market in the fourth quarter of 2024 will have short-term growth thanks to foreign capital flows. When the Fed continues to lower interest rates, the market can expect foreign capital flows to return to Vietnam. However, it should be noted that information about the Fed has been reflected in the stock price level in the past, so it may have little impact on the stock index in the short term. Accordingly, the impact of the timing of the Fed's interest rate cut will not be as noticeable as the level of interest rate cuts.
DSC Securities Company assessed that the market is in the process of adjusting and accumulating before surpassing the resistance level of 1,300 points. The important support level of VN-Index is the 1,250 - 1,260 point zone. This accumulation zone will be an opportunity to restructure the portfolio for investors who already have a position, while it is an area that can be taken advantage of by investors who missed out in the recent short-term market bottoming.
According to experts, there will be some groups of businesses that benefit more in the context of low interest rates, such as businesses with high loan ratios and large financial costs such as real estate, steel, electricity and water, infrastructure construction, etc. In addition, when the exchange rate cools down, businesses with imported inputs or issuing bonds and borrowing in foreign currencies will reduce cost pressure, for example, steel and real estate businesses, some retail, transportation and warehouse corporations.
