Vietnam Insight

▶ The VN-Index continued to fluctuate within a narrow range around the MA200 resistance level during Tuesday's trading session. The index opened slightly higher, then oscillated between 1,766 and 1,789 before closing with a 3-point loss. Liquidity remained flat, hovering near the 20-session average. Overall, the market is consolidating to absorb selling pressure before potentially breaking out to higher levels. Foreign investors increased their net selling, with the total net sell value rising to VND 769 billion.

▶ At the close, the VN-Index fell 3.36 points (-0.19%) to 1,773.41 points, while the HNX-Index rose 3.23 points (+1.12%) to reach 290.91 points. Total liquidity across the three exchanges reached VND 17.1 trillion, with approximately 711 million shares traded. Foreign investors expanded their net selling to VND 769 billion; notable net sales included TCB (-VND 221 billion), VHM (-VND 185 billion), and FPT (-VND 105 billion). Conversely, notable net buys included VNM (+VND 60 billion), FRT (+VND 60 billion), and LPB (+VND 55 billion).

▶ Technical perspective: A lack of follow-through in buying demand caused the VN-Index to continue fluctuating with low liquidity around the critical MA200 level. Financial stocks continued to attract capital flows during the session, while buying and selling pressures remained generally balanced, reflecting a cautious sentiment and indecision among market participants. High interest rates remain the primary factor weighing on market liquidity.

From a technical perspective, the VN-Index is currently testing the MA200, with signs of improving buying interest. However, capital inflows are not yet strong enough to drive the index to break out of the current 1,780–1,800 point consolidation range. A rally driven by strong demand that allows the VN-Index to decisively surpass the 1,800-point mark would reinforce our view that the market's recovery trend is likely to continue.

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.