Vietnam Insight

▶ The VN-Index posted a modest recovery on Tuesday. The index opened around the reference level and traded within a narrow range for most of the session, closing up 8.8 points. The market's gains were driven largely by VIC, which rose 1.88% and contributed approximately 7.5 points to the index. Market liquidity declined significantly to a low level, reflecting investor hesitation and cautious cash flow. Foreign investors continued to be net sellers, although the net selling value was not particularly large.

▶ At the close, the VN-Index gained 8.8 points (+0.48%) to 1,830.44 points, while the HNX-Index added 0.51 points (+0.18%) to 281.11 points. Total trading value across the three exchanges reached VND 15 trillion, equivalent to approximately 618 million shares traded. Foreign investors recorded a net sell value of VND 399 billion, with notable net selling in VCB, VPB, and DXG. On the other hand, key net-bought stocks included FPT, VIB, and HCM.

▶ Technical Perspective: Following yesterday's sharp decline, the VN-Index regained balance and closed higher by more than 8 points. The decline in liquidity suggests that selling pressure has eased, with no clear signs of aggressive distribution. At the same time, buyers remain cautious and are continuing to monitor supply-demand dynamics before increasing their exposure. In upcoming sessions, if market liquidity continues to improve and the market maintains its balanced condition, this would be a positive signal confirming that the recent correction has ended, thereby laying the groundwork for a new upward trend. In the short term, the VN-Index is likely to continue fluctuating within the 1,800-1,850 point range.

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. 

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.