Vietnam Insight

▶ The index opened the trading session with a 6.33-point gap up after a slight correction the previous day. The volatile developments in the Middle East were partly reflected in the market correction over the past month, although the effects of the conflict are still present, with Brent crude continuing to maintain above USD100/barrel. Overall market sentiment remained stable, with securities stocks and VIC contributing positively to the market's recovery in today's trading session.

▶ At the close of trading, the VN-Index increased by 11.95 points (+0.72%), reaching 1,674.49 points; the HNX-Index decreased by 1.77 points (-0.70%), to 250.59 points. Market liquidity continued to decline during the recovery session, remaining below the 20-day average at VND 27.1 trillion, corresponding to 1,072 million shares traded. Foreign investors continued to net sell VND 849 billion today, with the largest net selling value in BSR, HDB, and VCB. Conversely, VIC, FPT, and TCH were the stocks that saw net buying.

▶ Technical perspective: After a slight correction in the VN-Index due to escalating conflict in the Middle East, the index regained its recovery momentum. The index is trading above the reference level and holding the MA200 mark, but liquidity has decreased. Technically, the VN-Index is 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 continued 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 usually confirms a bottom when this percentage fluctuates between 30% and 40% and peaks around 60-70%. With the current figure hovering around 36%, data shows 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, thereby opening up the possibility of the Fed resuming interest rate cuts sooner. This could help 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. 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.