Vietnam Insight

▶ The index opened with a 6.37-point gain after the recovery from the previous session. Securities stocks had a brilliant trading session, with some stocks reaching their daily limit, such as HCM and VIX, thanks to expectations that Vietnamese stocks would be included in the MSCI upgrade watchlist, as the market had met 10 out of 18 criteria for upgrade eligibility. Although the index continued to face selling pressure from foreign investors, domestic investor demand overcame this selling pressure. The index is heading towards the strong resistance zone of 1,920-1,950.

▶ At the close of trading, the VN-Index closed up 16.35 points (+0.87%), reaching 1,891.20 points; the HNX-Index increased 1.04 points (+0.42%), reaching 248.46 points. Market liquidity surged compared to previous sessions and exceeded the 20-day average, reaching VND 25.7 trillion, corresponding to 1,004.1 million shares traded. Foreign investors continued their strong net selling of VND 1,107 billion today, with the largest net selling values in FPT, ACB, and HPG. Conversely, POW, MSN, and DGC were the stocks that saw net buying.

▶ Technical Perspective: The VN-Index had an impressive upward session with good spread across sectors, with the banking and securities sectors making a prominent contribution. Liquidity improved compared to previous sessions and exceeded the 20-day average, with money flowing in as the market approached its historical peak. This is a necessary condition for the market to reach higher milestones. In the short term, the market has overcome the important resistance of 1,860 points and is continuing towards the historical peak of 1,920–1,950 points before facing correction pressure. The nearest support level is at the psychological mark of 1,800 points, while a stronger support zone is identified around 1,680 points.

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 its previous peak of 1,950 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 strengthened.

Strategy: Investors should limit chasing rallies and selectively choose stocks showing improvement in business performance. 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 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.