Vietnam Insight

▶ Following a series of recovery sessions, the market experienced volatility as the broader index approached the resistance level around 1,780 points. While the market remained in positive territory during the morning session, volatility intensified in the afternoon—particularly as the ATC (At-The-Close) session approached. At one point, the VN-Index retreated to 1,769 (a drop of approximately 8 points); however, buying pressure during the ATC session helped the index close near the reference level. Liquidity increased today but remained roughly in line with the 20-session average. A positive highlight was the continued strong net buying by foreign investors, marking their third consecutive session of net purchases.

▶ At the close, the VN-Index fell 0.77 points (-0.04%) to finish at 1,776.46 points, while the HNX-Index rose 7.18 points (+2.51%) to reach 293.59 points. Total liquidity across the three exchanges reached VND 21.4 trillion, with approximately 829 million shares traded. Foreign investors maintained solid net buying momentum, recording a net inflow of VND 498 billion; notable net buys included VHM (+VND 383 billion), VIC (+VND 147 billion), and MBB (+VND 123 billion). Conversely, stocks facing significant net selling included VPB (-VND 99 billion), VIB (-VND 48 billion), and NVL (-VND 39 billion).

▶ Technical Perspective: Recovery momentum was sustained during the first half of the trading session before the VN-Index faced short-term profit-taking pressure as it approached the critical MA200 resistance zone. Liquidity remained low while the index fluctuated within a narrow range, indicating that selling pressure was not overwhelming and buyers were gradually accumulating positions. Additionally, foreign investors continued to support the market by extending their net buying streak.

We expect the VN-Index to fluctuate within the 1,750–1,800 point range in the short term as buyers and sellers test each other's strength before a clearer trend emerges. If market liquidity remains robust enough to absorb profit-taking at this resistance zone, the index could re-establish a medium-term uptrend. Conversely, if selling pressure intensifies significantly around the 1,800-point mark, it would suggest that the current recovery requires further consolidation before entering a more sustainable uptrend.

In the positive medium-term case: In an optimistic scenario, easing inflationary pressures would create room for more flexible monetary policy, thereby supporting market valuations. Companies maintaining solid profit growth and trading at reasonable valuations—despite persistently high domestic interest rates—may present attractive investment opportunities for the medium to long term. Under this scenario, the VN-Index is expected to target the 2,000–2,100 point range in the second half of 2026. However, any recovery sessions during the remainder of July must demonstrate strong "bottom-fishing" demand.

In the base medium-term case: Conversely, if net selling pressure from foreign investors persists and domestic interest rates continue to rise—thereby dampening market liquidity—the VN-Index may lack fresh, positive capital inflows. It would likely trade sideways within the 1,750–1,850 point range during the second half of 2026. Weakness in the VIC and VHM stock groups could cause the VN-Index to retest the lower bound of the previous sideways range—around the 1,580–1,600 point level. Additionally, renewed geopolitical tensions between Iran and the US, combined with the likelihood of the Fed maintaining high interest rates, could reinforce this negative scenario by pressuring exchange rates and foreign capital flows into emerging markets like Vietnam.

Strategy: Investors can capitalize on market corrections to deploy capital incrementally while maintaining a reasonable cash position for risk management, remaining ready to increase exposure once a market recovery trend is confirmed. Investors should avoid using leverage (margin) to "catch the bottom," as the market may form a secondary low. Furthermore, technical rebounds offer opportunities to restructure portfolios by divesting from companies that are underperforming relative to expectations.