Vietnam benchmark VN-Index’s plunge opens up buying opportunities: expert

The 4.11% drop of the VN-Index on Tuesday after hitting an all-time high is "reasonable" and "could set a new price base for incoming capital flows", said Tran Hoang Son, director of market strategy at VPBank Securities (VPBankS).

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), on Tuesday dropped 64.01 points to close at 1,493.41, marking the first correction after hitting an all-time high of 1,557.42 points.

A necessary "pause" for the market

The VPBankS expert described the Tuesday session as a technical correction. In the previous day, Monday, the VN-Index surpassed its old peak of 1,536 points in early 2022. It gained over 463 points since the April 2025 bottom. From early June alone, the index rose nearly 16%, with many stocks increasing by 30-40% in a short time.

Son highlighted that the market had shown signs of overheating for 3-4 weeks, with the Relative Strength Index (RSI) exceeding 87, indicating a highly overbought condition and foreshadowing strong volatility.

“Many stocks had already reached their peaks, so a 5-7% correction is completely normal,” he noted.

The RSI helps investors gauge whether a stock or market is overbought or oversold, aiding in appropriate trading decisions.

“As prices climb and liquidity accumulates, profit-taking pressure becomes inevitable. Furthermore, some brokerage firms have reduced margin lending ratios by 1-2% due to overheated stock prices, affecting supply capacity and investor sentiment,” he explained.

Son also pointed to the positive signal from strong capital inflows, as shown by record-high liquidity. Thus, this "pause" of the VN-Index is reasonable and creates a new foundation for the next wave of investment.

He identified the 1,430-1,450 point range as the nearest support zone and expects the market to consolidate and rebound, with renewed money flow being a favorable scenario.

The expert advised investors to focus on stocks with strong earnings performance; those in leading sectors like banking, real estate, and securities; and stocks with strong net buying from foreign investors.

“The market is being strongly supported by the most accommodative monetary policy since 2020-2021. Besides large-cap stocks, investors can also watch midcaps and pennies, as some of them may surge sharply after the correction. However, in a major uptrend, large caps will likely remain the primary target of capital inflows,” he concluded.

Selling pressure dominated the HoSE on Tuesday, with only 41 stocks gaining and 314 declining, including 69 hitting their floor prices.

Remarkably, trading volume hit a record high of nearly 2.8 billion shares, with total transaction value exceeding VND71.76 trillion ($2.74 billion), setting a historic liquidity record in the 25-year history of the Vietnamese stock market.

Analysts attribute the surge in liquidity to a mix of favorable domestic macroeconomic conditions, a series of pro-growth policies, and optimism surrounding a potential upgrade of Vietnam’s stock market status.

The VN30 group, comprising 30 largest-cap stocks, fared even worse as all 30 constituents fell, with several hitting their floor prices, including MSN of retail giant Masan Group, SSI of Saigon Securities, HDB of HDBank, and TPB of TPBank.

Recent gainers such as VIC of Vingroup and GEX of Gelex were also unable to escape the broad sell-off, turning sharply lower and becoming key contributors to the index's decline.

Securities and real estate stocks experienced especially heavy losses, with many falling to their floor prices. Major decliners included HCM of Ho Chi Minh City Securities, VCI of Vietcap Securities, FTS of FPT Securities, PDR of Phat Dat Real Estate Development Corp., DIG of DIC Corp., CEO of CEO Group, DXG of Dat Xanh Group, and NVL of Novaland.

Foreign investors were net sellers to the tune of nearly VND882.4 billion ($33.65 million) on the HoSE. They mainly net sold FPT, VIX of VIX Securities, MWG of Mobile World Investment Corp., and VPB of VPBank.