Vietnam Insight

▶ The market continued to trade in a volatile manner on Tuesday. Although the VN-Index at one point approached the 1,812-point level, stronger selling pressure emerged during the afternoon session, causing the index to trim its gains and close up by only 2.63 points. Nevertheless, the advance lacked broad market participation, as VIC played a dominant role in supporting the index, contributing more than 10 points to the VN-Index's movement on its own. Market breadth was clearly negative, with 225 decliners compared to 93 advancers. A positive highlight was the continued net buying from foreign investors, although the value of net purchases remained relatively modest.

▶ At the close, the VN-Index gained 2.63 points (+0.15%) to finish at 1,791.41 points, while the HNX-Index fell 0.54 points (-0.19%) to 282.65 points. Combined trading value across the three exchanges reached VND 22.8 trillion, equivalent to approximately 939 million shares traded. Foreign investors maintained a net buying position of VND 280 billion, led by VIC (+VND 362 billion), VIX (+VND 175 billion), and HCM (+VND 64 billion). On the other hand, the most heavily net-sold stocks were TCB (-VND 99 billion), STB (-VND 49 billion), and HPG (-VND 48 billion).

▶ Technical perspective: The market maintained strong upward momentum during the morning session and briefly moved above the 1,800-point threshold. However, as the VN-Index entered the 1,790–1,810 resistance zone, profit-taking pressure increased, causing gains to narrow and resulting in heightened volatility around the 1,800-point level. In our view, this development should not be interpreted as a negative signal. A period of consolidation and absorption of selling pressure near resistance is necessary to cool excessive market optimism and establish a stronger base for the next upward move. If the VN-Index decisively breaks above the 1,800–1,810 range with further improvement in liquidity, the bullish trend could be reinforced, opening the door for advances toward higher levels.

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.