Vietnam Insight

▶ The index opened the week with a gap up of 3.56 points, continuing the upward trend from the previous session. Profit-taking pressure on Vingroup stocks weighed on the index during today's trading session. The index also experienced net selling pressure from foreign investors for more than 10 consecutive sessions; domestic investor demand failed to overcome this selling pressure from foreign investors. BSR shares hit the ceiling price today after the announcement of its inclusion in the VN30 index basket, replacing DGC shares.

▶ At the close of trading, the VN-Index fell 19.87 points (-1.04%), to 1,895.50 points; the HNX-Index rose 1.57 points (+0.64%), to 248.06 points. Market liquidity in the correction session increased sharply compared to previous sessions and exceeded the 20-session average, reaching VND 29.9 trillion, corresponding to 1,062.7 million shares traded. Foreign investors continued to net sell VND 1,019 billion today, with the largest net selling values in VHM, FPT, and DGC. Conversely, BSR, GEE, and DCM were the stocks that saw net buying.

▶ Technical Perspective: The VN-Index corrected below the important support level of 1,900 points during the correction driven by Vingroup stocks. The correction spread to most sectors after the index had been rising continuously in the recent period. However, investor sentiment was not significantly affected because the correction mainly came from Vingroup stocks. In the short term, the index will trade sideways around the important resistance level of 1,900 points, potentially heading towards the 1,950 point region as net selling by foreign investors cools down. The market is likely to experience fluctuations to restructure and shift capital to new leading stock groups such as banking and securities.

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.