Vietnam Insight

▶ On Thursday, the market cooled down after a sharp surge. The fragility of the Middle East ceasefire agreement dampened bullish sentiment and led to profit-taking pressure, causing many stocks to reverse and correct downwards. Liquidity decreased compared to yesterday's session, but remained at a relatively high level and higher than the 20-day average. The VN-Index opened in the red and weakened towards the end of the morning session, closing down nearly 20 points, equivalent to -1.13%. Some real estate and construction stocks maintained good gains, such as NVL, DXG, HHV, and VCG. Foreign investors recorded a strong net selling session, dominated by a net selling value of over 3,000 billion VND in VPL (conducted through put-through transactions).

▶ At the close of trading, the VN-Index fell -19.87 points (-1.13%), closing at 1,736.68 points; the HNX-Index fell by 2.34 points (-0.92%), reaching 250.98 points. Liquidity across all three exchanges decreased to 30.7 trillion VND, corresponding to approximately 1.2 billion shares traded. Foreign investors continued net selling, with a net selling value of 2,494 billion VND, and over 3,000 billion VND in VPL alone. Stocks with strong net buying included HPG, VIX, TCB…

▶ Technical perspective: The VN-Index declined slightly with average liquidity after a surge in the previous session. Liquidity showed a shift towards sectors such as real estate, public investment, and construction materials. The decline, with minimal volatility and moderate liquidity, suggests this was merely a technical correction. In the base scenario, we believe the VN-Index will continue to trade sideways. The index closed right at the MA50, with the RSI at a neutral level of 56. If the US and Iran reach an agreement to end the war, this would be very positive news, helping the market return to its previous upward trend.

In the base scenario: A ceasefire agreement would improve investor sentiment, but the two sides have not yet reached a complete agreement to end the war. During this volatile period, the VN-Index will continue to trade sideways around 1,580-1,800 points.

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 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 reinforced.

Strategy: Investors should limit chasing rallies and selectively choose stocks showing improvements in business operations. Currently, capital flows tend to favor sectors with domestic momentum such as public investment, banking, and construction materials. For the real estate sector, after a period of deep discounts, signs of capital returning have appeared in recent sessions. Meanwhile, the securities sector continues to be supported by the market upgrade narrative, thereby maintaining a certain appeal to investors.