Vietnam Insight

▶ In the first trading session of August, the market saw a positive and widespread increase. Opening with a 10-point gain, the index quickly attracted capital and maintained its positive momentum throughout the session, closing near its highest price of the day. Most sectors performed positively, notably Banking, Securities, and Real Estate. The pair VIC and VHM experienced slight declines while other sectors recovered well. Liquidity improved, increasing compared to the previous day's decline, a positive sign supporting the index's recovery. Foreign investors returning to net buying also contributed to the market's recovery.

▶ At the close of trading, the VN-Index rose 27.06 points (+1.56%), closing at 1,762.84 points; the HNX-Index increased 8.03 points (+2.96%), reaching 279.28 points. Liquidity on all three exchanges improved to 20 trillion VND, corresponding to approximately 864 million shares traded. Foreign investors reversed their trend to net buying of 1,057 billion VND, notably FPT (+526 billion VND), HPG (+283 billion VND), and VCB (+136 billion VND). Conversely, stocks experiencing net selling included NLG (-114 billion VND), STB (-71 billion VND), and TCB (-71 billion VND).

▶ Technical perspective: Market breadth improved significantly thanks to the return of foreign capital, helping the VN-Index continue its recovery and approach the resistance zone of 1,770 – 1,800 points, corresponding to the MA200 area. In just over a week, the index has almost recovered all the points lost since breaking below the MA200 level.

The VN-Index closed near its highest point of the session, while liquidity remained around average, indicating that demand is absorbing supply well and selling pressure has significantly decreased after the two-week period of forced selling. In addition, the RSI indicator is currently fluctuating around the neutral level of 50, suggesting that the recovery momentum is not yet overheating and still has room to continue.

Statistics: In the first trading session of the week, the percentage of stocks trading above the MA200 line fell below 25%, indicating widespread selling pressure at its peak and the market trading at a bottom. Historically, this indicator only fell 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.

In the positive medium-term scenario: In an optimistic scenario, a less tense inflation outlook will create room for more flexible monetary policy, supporting market valuations. Businesses maintaining good profit growth, trading at appropriate valuations despite high domestic interest rates, could be good investment opportunities for medium- to long-term goals. Under this scenario, the VN-Index is expected to reach 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 buying pressure at the bottom.

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 1,580-1,600 points. Furthermore, the renewed 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 flows into emerging markets like Vietnam.

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.