Vietnam Insight

▶ Approaching the MA200 resistance zone, the VN-Index experienced a session of narrow-range fluctuation and closed with a "long lower shadow" candle, signaling a positive test of selling pressure. Cash flow improved as liquidity rose to the 20-session average, with strong momentum spreading across the Financial sector. Although foreign investors were net sellers, the value was modest at approximately VND 280 billion. While Banking stocks played a leading role, VIC and VHM acted as a drag on the VN-Index's recovery; this pair alone shaved nearly 12 points off the market index.

▶ At the close, the VN-Index rose by 8.71 points (+0.49%) to finish at 1,776.77 points, while the HNX-Index fell by 5.76 points (-1.96%) to 287.68 points. Total liquidity across the three exchanges reached VND 18.9 trillion, with approximately 807 million shares traded. Foreign investors were net sellers to the tune of VND 280 billion, notably offloading TCB (-VND 360 billion), VHM (-VND 248 billion), and FPT (-VND 82 billion). Conversely, notable net buys included DMX (+VND 170 billion), SHB (+VND 69 billion), and VNM (+VND 64 billion).

▶ Technical perspective: Cash flow participation has become more active, and market breadth continues to improve, indicating that investor sentiment is gradually stabilizing. The VN-Index fluctuated around the MA200 and closed with a Doji candle, reflecting the tug-of-war between buying interest and selling pressure at a critical level. Trading activity was concentrated primarily in the financial and industrial sectors. From a technical perspective, the index held above the MA200 and showed signs of improving buying interest, though not yet strong enough to drive a breakout from the current consolidation range of 1,780–1,800. Strong buying pressure pushing the market decisively above the 1,800 mark would reinforce the outlook for a market recovery.

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.