Stock market liquidity remains tight as Middle East tensions approach a potential flashpoint; investors await developments

Liquidity in the market is exceptionally low today, reflecting a risk-off mood as Middle East tensions approach a potential flashpoint. Investors are also monitoring rising risk concerns amplified by social media posts from President Trump. In this environment, holding cash is viewed as a relatively favorable position because the direction of the next few hours remains unclear. If the conflict intensifies, the probability is high that the market will adjust, with cash likely to retain an advantage; even if de-escalation occurs, the outcome may be more consistent with compression than a clear, constructive resolution.

Trading activity and market breadth

Liquidity on HSX and HNX today is around 15.6 trillion VND (excluding deals), the lowest since the end of March last year. Trading has fallen sharply, a move attributed to psychological factors rather than a lack of available funds.

Although the VN-Index closed slightly lower at -0.54%, investors still absorbed substantial losses: more than 41% of stocks (with trading) fell by over 1% in value. Over the last three sessions, the index has pulled back only modestly, but each day more than 100 stocks declined sharply. For HSX, the past three sessions showed 112 stocks down more than 3%, averaging roughly one stock per day “eroding” value. The decline is described as a sequence of smaller cuts rather than a single shock.

Key drivers: risk sentiment and oil

Information flow about the risk of escalation is dominating the market, while other developments are being largely disregarded. In the short term, there is little other actionable information. One relatively clear expectation is that oil prices will rise if escalation continues, given potential impacts to oil & gas infrastructure and logistics.

In early-week trading, the crude market remained calm, with WTI around $110 per barrel and Brent around $107 per barrel. The lack of immediate spikes is characterized as “waiting for a storm.”

Derivatives: steadier tone, defined levels

The derivatives market is described as steadier than the underlying market, with more favorable Long/Short opportunities. A broad trading boundary is identified in the 1835.xx–1850.xx region. A drop below 1835.xx would weaken momentum. Below that level, another boundary is cited at 1816.xx, along with a positive basis that could create “traps.”

Despite the opportunities, the guidance emphasizes disciplined position management. A notable development is that the basis at the end of the session widened by more than 9 points. The situation is described as capable of changing quickly, and the wide spreads are expected to be corrected immediately rather than treated as a trading opportunity.

VN-Index related levels

VN30 closed at 1836.25. Nearest resistance levels for tomorrow are listed as 1850; 1859; 1865; 1879; 1887; 1892; and 1906. Support levels are listed as 1835; 1816; 1802; 1786; 1769; and 1759.

Outlook

The immediate recommendation is to wait rather than take on risk, with the expectation that opportunities may emerge once uncertainty clears. The escalation period is framed as a key test for the market, with tension expected to build toward a peak; if the market stabilizes after the peak passes, strength could re-emerge.