Geopolitical tensions between Iran and Israel have raised concerns about a widespread conflict in the Middle East, constant worries about oil prices, rising inflation and negative impacts on global financial markets. Geopolitical tensions between Iran and Israel are becoming the focus of the world due to concerns about negative impacts on the global economy. It is known that this war has lasted for more than 7 months and is escalating to an unpredictable level. Many attacks have broken out such as Washington's attack on the facilities of some pro-Iranian forces in Syria and Iran or Tehran's retaliatory attack on Israel on the night of April 13 to the morning of April 14 because Tel Aviv bombed the Iranian Embassy in Syria on April 1. Most recently, Israel is said to have attacked Iran on April 19.
The tit-for-tat attacks between Iran and Israel have raised concerns about a widespread conflict in the Middle East, constant worries about escalating oil prices, rising inflation and impacts on the global economy in general and Vietnam in particular.
According to statistics from FPT Securities (HM:FTS) (FPTS) on the impact of wars on the stock market over the past 100 years. Notably, there were 3 major wars that had a strong impact on the financial market: the attack at Pearl Harbor (-19.8%), Iraq's attack on Kuwait (-16.9%) and North Korea's attack on South Korea (-12.9%).
In addition, the remaining wars only affected the stock market in a short time with a fluctuation range of only 1-6%.
According to FPTS, the continued escalation of tensions between Iran and Israel could have a negative impact on the global energy market. Recorded on Oilprice at 6:30 p.m. on April 21, 2024 (Vietnam time), WTI oil price was at 83.24 USD/barrel, up 0.62% (equivalent to an increase of 0.51 USD/barrel). Similarly, Brent oil price was at 87.31 USD/barrel, up 0.23% (equivalent to an increase of 0.20 USD/barrel).
Rising oil prices will make it more difficult for central banks to control inflation. According to FPTS, the worst case scenario is that a direct conflict between Iran and Israel will cause oil prices to increase from 60-64 USD/barrel and global inflation could increase by more than 1.2%.
According to experts, under the impact of many negative information about geopolitical tensions, oil prices, inflation and exchange rates, VN-Index will continue to face correction pressure reaching the 1,120-1,130 point range. "Margin call" can be triggered widely when stocks "evaporate" from 20-30% in value.
In terms of investment strategy, when the downtrend may continue and the risk is still high when the market has not yet been guaranteed to reverse and increase, opening a new buying position may lead to large losses. Instead, investors need to carefully observe the oil price movement as well as wait for the equilibrium point of the stock market. Therefore, buying when the market has established an uptrend will limit the risk, because low-priced stocks can still go lower.
Source: Investing
