Vietnam Insight

▶ The index opened the trading session with a sharp decline of 16.82 points after the previous correction. Foreign investors continued their net selling trend, putting pressure on the index's recovery. The market correction occurred after the index surpassed its new historical peak of 1,900. Securities stocks faced strong selling pressure following negative news regarding stocks in the sector.

▶ At the close of trading, the VN-Index fell 8.34 points (-0.44%), to 1,885.44 points; the HNX-Index fell 0.45 points (-0.18%), to 252.66 points. Market liquidity increased during the index correction, exceeding the 20-day average, reaching VND 41.0 trillion, corresponding to 1,379 million shares traded. Foreign investors net sold VND 291 billion, with the largest net selling values in VNM, VCB, and VIC. Conversely, GMD, KBC, and VHM were the typical net buying stocks.

▶ Technical perspective: The VN-Index corrected slightly by more than 8 points due to profit-taking pressure at the peak. Liquidity remained stable, with selling pressure mainly concentrated in the Securities sector and stocks that had risen sharply; there were no signs of widespread sell-offs. Since the index remained above the MA20 and MA50 lines, this is considered a healthy correction within the main uptrend.

In the context of the ongoing 14th Party Congress, market liquidity tended to slow down as investors maintained a cautious and observational attitude. However, we believe that capital flows will soon improve again after the new leadership is finalized. Historically, previous Party Congresses have shown that when policy direction becomes clear, market sentiment is usually loosened, thereby creating momentum for a new upward movement.

From a statistical perspective, we monitor the percentage of stocks trading above the 50-day moving average (EMA50) as an indicator to identify market bottoms. Historically, the VN-Index typically confirms its bottom when this ratio fluctuates between 30% and 40%, and peaks around 60-70%. With the current figure above 50%, the data suggests there is still room for growth for most stocks.