Vietnam Insight

▶ The VN-Index experienced a slight correction on Tuesday as it approached its previous peak around 1,870-1,880. The market opened higher than the reference price and maintained gains in the morning session, largely driven by VIC and VHM. However, selling pressure in the afternoon caused many stocks to lose their gains, and the VN-Index closed down 3.6 points. Overall, today's volatility was a reasonable development given the index's significant recovery from its lows. Generally, expectations for Q1 earnings results and news from global markets remain the main factors influencing current market movements.

▶ At the close of trading, the VN-Index fell 3.63 points (-0.2%), closing at 1,833.48 points; the HNX-Index fell 4.06 points (-1.58%), reaching 253.27 points. Liquidity across all three exchanges was approximately at the 20-day average, reaching 27.04 trillion VND, corresponding to over 983 million shares traded. Foreign investors continued to net sell today with a value of 384 billion VND, with the stocks experiencing the strongest net selling being FPT (-171 billion VND) and VCB (-124 billion VND). Conversely, the stocks that saw net buying were the FUEVFVND fund certificate and HPG.

▶ Technical perspective: The VN-Index opened with a strong gap up at the beginning of the session, but after approaching the 1,860 point resistance level, increased selling pressure caused the index to reverse and close in the red. Liquidity remained relatively low, indicating profit-taking pressure, but there was no risk of a sell-off. In the short term, the market may face correction pressure after failing to successfully test the 1,860 point level. The nearest psychological support level is at 1,800 points, and further down is the 1,680 point area.

In the underlying scenario: The ceasefire agreement improved investor sentiment, but the two sides have not yet reached an agreement to completely end the conflict. During this volatile period, the VN-Index continues to head towards the 1,860 point level.

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. 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. At the current stage, capital flows tend to favor sectors linked to domestic momentum such as public investment, banking, and construction materials. For the real estate sector, after a period of deep discounts, signs of capital inflow have appeared in recent sessions. Meanwhile, the securities sector continues to be supported by the market upgrade story, thereby maintaining a certain attractiveness to investors.