Vietnam Insight

▶ The VN-Index declined in the first trading session of the week. Although it successfully maintained a narrow range for most of the session, strong selling pressure in the afternoon caused stocks to plummet rapidly, putting pressure on the overall index. Generally, the sectors with the sharpest declines were Banking and Real Estate, with drops ranging from 3-5%, and Securities (VND and VCI hitting the floor limit). Liquidity remained flat compared to Friday's session, approximately at the 20-day average. Foreign investors maintained their net selling momentum, contributing to the market's decline. Overall, although stock prices have entered deep discount zones, bottom-buying activity remains unclear, leaving the market lacking the demand to support a strong recovery.

▶ At the close of trading, the VN-Index fell 17.1 points (-1.01%), closing at 1,669.01 points. The HNX-Index fell 3.64 points (-1.33%), reaching 269.35 points. Total trading volume across all three exchanges reached 16 trillion VND, equivalent to approximately 732 million shares traded. Foreign investors net sold 741 billion VND, with selling pressure mainly concentrated in the Banking and Securities sectors. The stocks experiencing the strongest net selling were VPB (-96 billion VND), SHB (-71 billion VND), and TCB (-71 billion VND)... Conversely, notable net buying included LPB (+69 billion VND), MBB (+56 billion VND), and FRT (+29 billion VND)... 

▶ Technical perspective: The VN-Index traded within a narrow range for most of the session with low liquidity. However, after 2 PM, selling pressure from margin calls reappeared along with a sharp increase in liquidity, causing the market to continue its correction. The initial selling pressure was concentrated in the real estate and mid-cap sectors before spreading to large-cap stocks with high liquidity. The Fear & Greed Index once again penetrated deep into the extreme fear zone, while the RSI remained in the oversold region (around 27). Technically, despite the strong selling pressure towards the end of the session, the VN-Index still closed higher than the level of July 22nd, indicating that supply pressure remained concentrated in certain sectors rather than spreading into a broad sell-off. Although sellers still dominate, the weakening intensity of selling in recent sessions is an initial signal that the downward momentum may be gradually losing ground. We expect the market to enter a recovery phase for the remainder of the week.

Statistics: The percentage of stocks trading above the MA200 line has fallen below 25%, indicating that widespread selling pressure is approaching its peak and the market may be entering a bottoming phase. Historically, this indicator has only fallen below 25% during some periods of sharp corrections such as July 2018, March 2020, November 2022, October 2023, or April 2025. After these periods, the VN-Index recorded significant recovery in the following months.

Strategy: Following the recent sharp correction, the valuations of many stocks have become more attractive, opening up opportunities for accumulation in companies with strong fundamentals and positive growth prospects. Investors can take advantage of market corrections to gradually disburse funds, while maintaining a reasonable cash ratio to manage risk and be ready to increase positions when the market trend confirms a recovery. Investors should limit the use of leverage (margin) to buy at the bottom when the market has not yet confirmed that the downtrend has stopped.