Vietnam Insight

▶ The index opened the trading week with a sharp decline of 18.19 points, continuing the strong correction from the end of last week as negative sentiment and tensions in the Middle East dominated the market, showing no signs of easing and raising concerns about the market outlook. Strong selling pressure persisted throughout the trading session, with no significant buying demand, and the market continuously experienced strong selling pressure towards the end of the session. The index also faced net selling pressure from foreign investors and closed below the important support level of 1,600.

▶ At the close of trading, the VN-Index fell 56.64 points (-3.44%) to 1,591.17 points; the HNX-Index fell 5.92 points (-2.43%) to 237.54 points. Market liquidity continued to increase sharply compared to the previous session, reaching the 20-day average of VND 31.7 trillion, corresponding to 1,243 million shares traded. Foreign investors net sold VND 513 billion today, with the largest net selling value in MWG, HDB, and VHM. Conversely, MSN, VNM, and VCK were the stocks that saw net buying.

▶ Technical Perspective: Increased geopolitical tensions following the US setting deadlines for Iran have raised concerns about potential escalation, triggering a widespread correction in Asian stock markets. In this context, the VN-Index continued its downward trend, falling below the MA200 line and retreating to the crucial support zone of 1,580 points – also the bottom established in October 2025. Market liquidity showed signs of improvement, indicating a return of bargain-hunting pressure to a certain extent; however, selling pressure remained dominant in the overall market.

Although valuations have become more attractive, the short-term trend remains unclear. The upcoming trading sessions will be decisive in determining the index's direction. A strong rebound, sufficient to recover all the losses from the last two sessions, would be a positive signal, reinforcing the possibility of maintaining a medium-term uptrend. Technically, the RSI has entered the oversold zone, indicating the possibility of a technical rebound in the next few sessions.

From a statistical perspective, we monitor the percentage of stocks trading above the 50-day moving average (EMA50) as an indicator to identify the market bottom. Historically, the VN-Index usually confirms a bottom when this percentage fluctuates between 30% and 40% and peaks around 60-70%. With the current figure at around 36%, the data shows that many stocks have fallen significantly recently.

In the base case: The VN-Index is expected to hold the 1,580-point support level in the short term as investors await clearer signals regarding the easing of geopolitical tensions. If tensions ease, pressure on global oil prices could ease, opening the possibility of the Fed resuming its interest rate cutting cycle sooner. This could help improve risk sentiment in the market and support the stock market.

In a negative scenario, prolonged disruptions in the Strait of Hormuz could further tighten global oil supply, keeping oil prices high for an extended period. This scenario increases the risk of stagflation (high inflation coupled with low economic growth). Historically, such environments are often unfavorable for the stock market and could lead to a deeper correction in the VN-Index. In the event that the market continues to definitively lose the 1,580 support zone, accompanied by weak recovery sessions, the downtrend may continue to be reinforced.

Strategy: Investors may consider investing in small portions during market dips; however, given the uncertain geopolitical situation, we recommend maintaining a moderate proportion of stocks to manage risk. During this period, priority should be given to sectors benefiting from domestic factors such as public investment, banking, and construction materials; at the same time, dips due to cross-margin call pressure may create opportunities to buy at attractive prices.