VN‑Index slides into critical 1,630-1,650 support zone

VN‑Index slides into critical 1,630-1,650 support zone

The domestic equity market recorded its third consecutive weekly decline amid heightened risk aversion driven largely by escalating geopolitical tensions in the Middle East.

Investors at a trading office of a securities firm in Hà Nội. — VNA/VNS Photo

After a sharp corrective phase, the VN-Index settled into an important support zone as investor caution remained pervasive, while valuations have been discounted to a five‑year average that market participants expect could attract capital in the near term.

Việt Nam's equity market recorded its third consecutive weekly decline amid heightened risk aversion driven largely by escalating geopolitical tensions in the Middle East. 

Selling intensified during the week, particularly among large-cap names, eroding key support levels and pushing the benchmark down to short-term lows. 

On the Hochiminh Stock Exchange (HoSE), the VN-Index closed the week at 1,647.81 points, while the HNX-Index on the Hanoi Stock Exchange (HNX) was last traded at 243.46 points. 

For the week, the former lost 2.86 per cent and the latter declined 0.97 per cent. 

Over the past three weeks, the VN-Index has surrendered more than 230 points, signalling a clear weakening of market momentum.

Attempts at recovery during the week proved unsustained. The VN-Index staged three rebound sessions that tested resistance around 1,740 points but failed as liquidity waned, and the market plunged in the final session of the week. 

Net capital flows were generally muted and fragmented. Buying interest remained localised rather than broad-based, preventing any durable upside.

Sector performance was broadly negative. The hardest-hit groups included fertilisers, chemicals, oil and gas, aviation and fisheries. 

Average market turnover fell sharply, with traded volume down by nearly 27 per cent week-on-week, reflecting increased investor caution and weak bargain-hunting demand. 

Foreign investors continued substantial net selling, with net outflows on HoSE amounting to several thousand billion dong, exacerbating downside pressure.

Market participants and securities firms maintained a cautious short-term stance on the trend. 

Saigon–Hanoi Securities (SHS) said the VN-Index remains in a downtrend below the 1,700-point resistance level, with immediate support around 1,630 points, corresponding to its December 2025 low.

SHS noted a shift to a more pessimistic market psychology and warned that selling pressure, including forced liquidations and deleveraging, may persist into this week.

Some analysts argued the 1,700 area is not yet sufficiently attractive to draw long-term capital while noting that a deeper pullback below 1,600 points could create a more compelling entry zone for patient investors, provided strict risk management is observed.

Meanwhile, Thien Viet Securities (TVS) expected the VN-Index to retest the 1,650 region and accumulate before mounting a recovery toward the end of March. 

The securities firm highlighted the upcoming FTSE Russell review as a potential catalyst to attract short-term foreign flows. 

Additionally, market valuations have already been discounted to a five-year average, a factor some market players deem appealing for short-term investors.

Geopolitical developments remain the dominant market driver. The widening conflict involving the US, Israel and Iran has raised the risk of global energy supply disruptions, notably around the Strait of Hormuz. 

Elevated oil prices have heightened investor sensitivity and weighed on equity markets, particularly in energy-importing economies such as Việt Nam.

From a portfolio management perspective, Petri Deryng, portfolio manager at PYN Elite Fund, said market instability has amplified volatility but also created opportunities for portfolio reallocation. The fund increased trading activity and shifted into stocks with more attractive valuations following the correction.

On a medium-term basis, several market indicators remain encouraging. Projections place the market’s price-to-earnings (P/E) ratio at around 10.4 times, even lower when certain large-cap stocks are excluded, suggesting valuations may be relatively attractive over the longer term.

Nevertheless, recommended tactics differ by investor horizon. Short-term traders are advised to avoid indiscriminate bottom‑picking, reduce equity exposure and wait for clearer stabilisation signals. 

Long-term investors may consider phased entries into fundamentally sound companies as valuations reach reasonable levels, while avoiding leverage amid heightened volatility.

Against this backdrop of persistent uncertainty, the 1,630–1,650 zone is cited by market participants as a key support range.

The next directional move for the VN-Index will hinge on the market's ability to hold this support band and on developments in the global macro environment. 

Bizhub