What unknown factors should we watch out for in the stock market in June?

While major stock markets around the world are continuously setting new highs thanks to the wave of investment in artificial intelligence (AI), the Vietnamese market experienced its second consecutive week of declines, along with a prolonged net selling spree by foreign investors. This contrasting trend reflects a strong shift in global capital flows and presents the VN-Index with a challenging period as a series of uncertainties converge in June. Let's review the unknowns for the stock market in June.

Is money flowing away from emerging markets?

The trading sessions at the end of May continued to clearly illustrate the divergence among global financial markets.

In the US, key indices such as the S&P 500, Nasdaq, and Dow Jones all set new historical milestones. In Asia, Japan, South Korea, and Taiwan also extended their strong gains, pushing many indices to unprecedented highs. The biggest driving force behind this price surge remains the story of AI and the semiconductor industry.

The fact that Micron of the US and SK Hynix of South Korea have joined the group of companies with a market capitalization exceeding $1 trillion is not simply a milestone for these two companies. It also signals that international capital is increasingly focusing on growth assets associated with AI – a field considered a new driver of global economic growth.

Furthermore, signs of cooling inflation in the US have eased market concerns about the possibility of the Federal Reserve (Fed) continuing to raise interest rates. Expectations of a more stable monetary environment have further facilitated a strong influx of capital into technology stocks and markets that directly benefit from the AI ​​race.

However, the downside of this trend is the shift of capital away from many emerging markets. While tech giants continuously attract global investment, Southeast Asian markets face the risk of shrinking liquidity and a decline in their relative attractiveness to international investors.

Developments in Vietnam partly reflect this trend. Last week, foreign investors continued to net sell over 5,000 billion VND, marking the 11th consecutive week of net selling. Cumulatively since the beginning of the year, the net selling value has exceeded 65,000 billion VND. This is not only short-term pressure on the market but also shows that Vietnam is being affected by the global capital reallocation process.

June will be a test for the VN-Index.

In contrast to the euphoria in many international markets, the VN-Index closed May with its second consecutive week of declines. Notably, the downward pressure did not stem from a few individual stocks but spread across the entire market.

Liquidity has plummeted to its lowest level in about a year, indicating a cautious sentiment among investors. In the absence of sufficiently strong supporting information, capital tends to remain on the sidelines rather than participating in bottom-fishing as in previous corrections.

June is expected to be a particularly crucial period for global financial markets as a number of major central banks, such as the European Central Bank (ECB) and the Bank of Japan (BoJ), hold their policy meetings. Meanwhile, a trend toward monetary tightening has emerged in many Asian economies, adding further pressure on capital costs and investment sentiment in the region.

Domestically, the market is awaiting May's macroeconomic data to assess the health of the economy and the outlook for corporate profits in the coming months. This is seen as one of the factors that could help improve investor confidence after a prolonged period of information scarcity.

Another noteworthy factor is the World Cup effect. Data from recent seasons shows that liquidity in the stock market tends to decrease during tournaments as individual investors' attention is diverted. However, this event also creates opportunities for certain sectors to benefit from increased consumer demand, such as retail, electronics, food, and beverages.

Technically, MBS Securities believes that the medium- and long-term trend of the VN-Index has not been broken as the index remains above key moving averages. However, the correction from the peak, accompanied by a sharp contraction in liquidity, suggests that the market likely needs more time to find a new equilibrium.

In this context, June can be seen as a "stress test" for the Vietnamese stock market. With net selling pressure from foreign investors not yet ending, global capital flows still favoring AI-related assets, and the global interest rate environment remaining volatile, caution is likely to remain the dominant sentiment in the market.

What investors need to watch right now is not just the VN-Index level, but more importantly, when capital flows back into the market. Only when liquidity improves and the pressure to withdraw capital decreases will the market have a basis for forming a more sustainable upward trend in the second half of the year.

Source: https://thoibaonganhang.vn/an-so-nao-can-chu-y-voi-chung-khoan-thang-6-182828.html