Vietnam Insight

▶ The recovery continued on Tuesday, with the VN-Index opening higher and maintaining its positive momentum for almost the entire trading session. Increased buying pressure in the afternoon, concentrated in the VIC-VHM group and a few bank stocks such as STB, HDB, and MBB, helped the index close at its highest price. Liquidity decreased slightly compared to the previous session and was lower than the 20-day average. Notably, foreign investors were net buyers for the second consecutive session, contributing to the momentum supporting the market's continued recovery. Money rotated between groups, with the VIC-VHM duo leading the market today; these two stocks alone contributed 12.6 points, almost equal to the 14-point increase of the VN-Index.

▶ At the close of trading, the VN-Index increased by 14.39 points (+0.82%), closing at 1,777.23 points. The HNX-Index rose 7.13 points (+2.55%), reaching 286.41 points. Total trading volume across all three exchanges reached 18.5 trillion VND, equivalent to approximately 736 million shares traded. Foreign investors maintained a strong net buying trend, net buying 891 billion VND during the session, notably in VIC (+438 billion VND), VHM (+283 billion VND), and MBB (+172 billion VND). Conversely, stocks experiencing net selling included VNM (-116 billion VND), VPB (-91 billion VND), and TCB (-61 billion VND).

▶ Technical perspective: The VN-Index continued its recovery momentum with market breadth slightly skewed towards gainers. The index has temporarily regained the 200-day moving average (MA200), and although it is approaching a key resistance zone, selling pressure remains relatively low. Meanwhile, foreign investors extended their net buying streak, indicating that capital from institutional investors is still supporting the market. After the recent sharp correction, the market's valuation has become more attractive, attracting sidelined capital back into the market. This demand has helped the VN-Index quickly recover to a key technical zone after the decline caused by margin call selling pressure.

We expect the VN-Index to retest the 1,800-point mark in the upcoming trading sessions. If liquidity remains positive and sufficient to absorb profit-taking pressure at this resistance level, the index could re-establish an uptrend in the medium term. Conversely, if selling pressure increases around the 1,800-point mark, the current recovery momentum will likely need more time to accumulate and confirm before forming a more sustainable uptrend.

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 and trading at appropriate valuations despite high domestic interest rates could be good investment opportunities for the medium to long term. 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 interest 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, 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 flows into emerging markets like Vietnam.

Strategy: Investors can take advantage of market corrections to gradually disburse funds, while maintaining a reasonable cash allocation 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 may form a second bottom. In addition, technical rebounds will be opportunities for investors to restructure their portfolios with companies that are not performing as expected.