Vietnam Insight

▶ The market continued to trade within a narrow range around the MA200 level, while liquidity kept declining. Trading value also fell to its lowest level since the beginning of the year. At the close, the VN-Index gained 7.55 points, with market breadth remaining relatively balanced as 165 stocks advanced and 137 declined on the HOSE. Overall, the index showed limited movement, while shrinking trading value reflected the persistent cautious sentiment among investors. The market may need additional consolidation to absorb selling pressure before resuming its recovery, or a positive catalyst strong enough to attract fresh capital and help the index break out to higher levels.

▶ At the end of the trading session, the VN-Index rose 7.55 points (+0.44%) to close at 1,734.24 points, while the HNX-Index fell 1.43 points (-0.51%) to 278.55 points. Total trading value across the three exchanges reached VND 14.4 trillion, equivalent to approximately 521 million shares traded. Foreign investors recorded net selling of VND 617 billion, with notable net sales in VIC (-VND 89 billion), VPB (-VND 87 billion), and VIX (-VND 73 billion). On the buying side, the most actively net-bought stocks were MSN (+VND 56 billion), VNM (+VND 41 billion), and DCM (+VND 37 billion).

▶ Technical perspective: The market continued to move within a narrow range around 1,725-1,730 points, while liquidity remained at its lowest level in more than a year. This marked the fourth consecutive session in which the VN-Index traded sideways, with limited participation from market liquidity, indicating that investor caution continues to dominate sentiment. In the coming sessions, if liquidity remains subdued while selling pressure does not increase significantly, the index may continue consolidating around the 1,725-point area, thereby forming a solid price base before establishing a new trend. Conversely, a sharp increase in liquidity accompanied by market breadth skewed heavily toward declining stocks would be a notable warning signal, suggesting the risk of a strong market move that could alter the current balance and trading dynamics.

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.