Vietnam Insight

▶ The market experienced another session of fluctuation around the MA200 line amidst continued low liquidity. By the close, the VN-Index had shed 5 points; market breadth leaned towards the selling side, with 220 stocks declining and 97 advancing. Most sectors traded within a narrow range, and market liquidity retreated to its lowest level since the beginning of the year, reflecting caution and hesitation among both buyers and sellers. The Oil & Gas sector saw its rally stall following yesterday's surge, with most stocks in the group trading sideways relative to their reference prices. Foreign investors continued their net selling trend, marking the fifth consecutive session of net outflows.

▶ At the close, the VN-Index fell 5.33 points (-0.31%) to finish at 1,726.69 points, while the HNX-Index dropped 2.34 points (-0.83%) to 279.98 points. Total liquidity across the three exchanges reached VND 15.6 trillion, corresponding to a trading volume of approximately 624 million shares. Foreign investors recorded a net sell of VND 711 billion, with notable sales in VIC (-VND 136 billion), STB (-VND 122 billion), and VPB (-VND 98 billion). Conversely, stocks attracting significant net buying included VNM (+VND 61 billion), DGW (+VND 48 billion), and FRT (+VND 33 billion).

▶ Technical Perspective: The market traded sideways for the third consecutive session amidst liquidity dropping to its lowest level since the beginning of 2026, indicating that capital flows have yet to make a significant return. This warrants attention, as low liquidity can render the market susceptible to sharp volatility should an imbalance between supply and demand arise. However, selling pressure shows no signs of panic selling, with the majority of declining stocks adjusting by less than 1%. In the coming sessions, if liquidity remains low without a rise in selling pressure, the VN-Index may continue to consolidate and build a price base before establishing a new trend. Conversely, a sharp rise in liquidity accompanied by market breadth skewed toward the selling side would serve as a warning signal of potential high volatility.

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.