Vietnam Insight

▶ At the start of the new trading week, the VN-Index experienced a volatile session, falling nearly 44 points and losing the 1,780 support level. Selling pressure appeared in the morning session across most sectors and surged in the afternoon as many securities companies carried out forced selling of accounts that violated regulations. Overall, the selling pressure was widespread, with the largest declines in the Securities and Real Estate sectors, and some large-cap stocks also experiencing sharp corrections such as HPG and MSN. The sharp increase in liquidity, coupled with the large decline and the index closing near its lowest point of the session, reflects that supply remains dominant.

▶ At the close of trading, the VN-Index fell 43.94 points (-2.46%), closing at 1,743.51 points; the HNX-Index fell 7.29 points (-2.5%), reaching 284.41 points. Liquidity on all three exchanges increased to 21 trillion VND, corresponding to approximately 965 million shares being traded. Foreign investors traded in both directions fairly balancedly during the session, with only a slight net selling of about 46 billion VND. The stocks with the strongest net selling were VCB (-149 billion VND), ST (-69 billion VND), and VPB (-64 billion VND)... Conversely, typical net buying included MWG (+205 billion VND), VIC (+73 billion VND), and VNM (+51 billion VND)... 

▶ Technical Perspective: Force sell pressure fueled a widespread decline across the market in the first trading session of the week. The widespread selling pressure, regardless of Q2 2026 earnings results, indicates that market sentiment is primarily influenced by technical factors and risk management practices. The VN-Index lost the MA200 support level, while bottom-buying demand was insufficient to create a rebound like last week, causing the index to return to its previous sideways range of 1,600–1,780 points. The sharp increase in liquidity, coupled with a large decline and the index closing near its lowest point of the session, reflects that supply remains dominant.

Losing the MA200 is a negative technical signal, suggesting the market may be entering a short-term correction. However, the RSI has moved deep into oversold territory, opening up the possibility of a technical rebound in the coming sessions. In the positive scenario, the VN-Index quickly reclaims the MA200 and heads towards the 1,830 point level, thus maintaining the medium-term uptrend. Conversely, in the base scenario, the index is likely to only experience a technical rebound before continuing to face selling pressure and fluctuating within the 1,600–1,780 point range.

In the positive medium-term scenario: In the optimistic scenario, a less tense inflation outlook will create room for more flexible monetary policy, supporting market valuations. Businesses maintaining good profit growth and trading at appropriate valuations despite high domestic interest rates could be good investment opportunities for the medium to long term. With this scenario, the VN-Index is expected to head towards the 2,000–2,100 point range in the second half of 2026. However, any recovery sessions in the remaining weeks of July must demonstrate strong bottom-buying demand.

In the base medium-term scenario: Conversely, if net selling pressure from foreign investors continues, and domestic interest rates continue to rise, leading to decreased market liquidity, the VN-Index may lack positive new capital inflows and is likely to consolidate sideways within the 1,750-1,850 point range in the second half of 2026. Weakening VIC and VHM stocks could cause the VN-Index to retest the lower boundary of the previous sideways range – around 1,580 points. Furthermore, escalating geopolitical tensions between Iran and the US, along with the possibility of the Fed maintaining high interest rates, could be external factors contributing to this negative scenario, putting pressure on exchange rates and foreign capital inflows into emerging markets like Vietnam.

Strategy: Investors can focus on selecting stocks with sideways consolidation price structures and strong business growth rather than solely focusing on VN-Index fluctuations for medium-term positions. In the short term, consider stocks that have been heavily sold off and are showing signs of recovery, such as those in the insurance, technology, and real estate sectors. Investors should limit the use of margin trading during this period when the trend is not clearly defined. For companies with poor business prospects after the Q2/2026 results are announced, investors may consider reducing their holdings to manage risk.