Vietnam Insight

▶ The index opened the trading week with a sharp decline of 26.72 points following escalating tensions in the Middle East. Brent crude prices quickly surpassed USD115/barrel, putting negative pressure on investor sentiment. Asian stock indices also declined, though not significantly. Despite the VN-Index's efforts to recover during the session, at times regaining the reference level, continued strong selling pressure from foreign investors pushed the index to close below the reference level.

▶ At the close of trading, the VN-Index fell 10.26 points (-0.61%) to 1,662.54 points; the HNX-Index fell 1.77 points (-0.70%) to 250.59 points. Market liquidity continued to decline sharply during the correction session, remaining below the 20-day average at VND 23.6 trillion, corresponding to 940 million shares traded. Foreign investors continued to net sell VND 1,370 billion today, with the largest net selling values in FPT, VCB, and VPB. Conversely, MSN, MWG, and DGW were the stocks that saw net buying.

▶ Technical Perspective: The VN-Index corrected after news of escalating conflict in the Middle East. The index still held the MA200 mark but experienced a decrease in liquidity. Technically, the VN-Index is currently still moving within the accumulation channel formed since Q3/2025. Notably, the 1,580 level has been successfully tested twice, with quick recoveries after sell-offs. Given the high geopolitical risk, our base scenario is that the VN-Index will continue to fluctuate within this sideways range. Accordingly, the index may gradually move towards the upper boundary of the channel, around 1,780 points.

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 typically confirms its bottom when this ratio fluctuates between 30% and 40%, and peaks around 60-70%. With the current figure at around 36%, the data suggests that many stocks have fallen significantly recently.

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

In the downside 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. If the market continues to decisively lose the 1,580 support level, accompanied by weak recovery sessions, the downtrend could be further strengthened.

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