Vietnam Insight

▶ The market attempted to extend its gains during Tuesday's trading session. Lower oil prices eased selling pressure, and many stocks successfully maintained their gains throughout the session. VIC and VHM continued to be the stars supporting the index with gains of 3.4% and 4.8% respectively, while HPG also performed well (+2.7%). Liquidity remained flat, approximately at the 20-day average.

▶ At the close of trading, the VN-Index rose 16.69 points (+0.95%), closing at 1,775.65 points; the HNX-Index rose 0.75 points (+0.3%), reaching 252.41 points. Liquidity across all three exchanges remained flat at 25.6 trillion VND, corresponding to approximately over 1 billion shares traded. Notably, foreign investors reversed their trend to net buying of 153 billion VND. The stocks with the strongest net buying were VIC, HPG, and MBB. Conversely, the stocks under net selling pressure were FPT, BID, and NVL…

▶ Technical perspective: The VN-Index continued to rise by nearly 17 points and approached the important resistance level of 1,780 points. Trading liquidity is relatively low, and capital flows haven't spread clearly, mainly concentrating on stocks belonging to the Vin group. This has caused most stocks to move sideways, with slight fluctuations but insignificant selling pressure. In the short term, the index is likely to continue experiencing volatility as it approaches the 1,780 resistance level. In the medium term, the VN-Index is currently consolidating within a range of 1,580-1,800 points.

In the base scenario: The ceasefire agreement has improved investor sentiment, but the two sides have not yet reached an agreement to completely end the war. During this volatile period, the VN-Index continues to move sideways around 1,580-1,800 points.

In the negative scenario: The prolonged disruption 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 an environment is 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 should limit chasing rallies and selectively choose stocks showing improvement 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 story, thus maintaining a certain attractiveness to investors.