What drives Vietnam's benchmark VN-Index to 3-year high?

VN-Index, which represents the Ho Chi Minh Stock Exchange, continued to reach a new high on Monday, driven by Vingroup and stocks of the oil & gas and industrial real estate sectors.

The U.S.'s involvement in the Iran-Israel conflict last weekend made investors worried about impacts on the stock market.

However, at the close of the trading session on Monday, VN-Index went up 8.83 points to 1,358.18, its record high since May 2022.

The driving force came mainly from Vingroup's VIC, the only stock in the VN30 group that increased to its ceiling price of VND92,800 ($3.54) per share. VN30 comprises 30 largest caps on the Ho Chi Minh Stock Exchange (HoSE).

VHM of Vinhomes also increased sharply by 5.41% to VND74,000 ($2.82) apiece.

The pair of stocks related to billionaire Pham Nhat Vuong became the main driving force for the VN-Index on Monday.

Although the oil & gas group did not strongly increase at the beginning of the session, it maintained green color as the group is expected to benefit from rising oil prices amid the escalating Iran-Israel conflict.

Statistics show that three oil and gas stocks, including GAS (PV Gas), PLX (Petrolimex), and BSR (Binh Son Refining and Petrochemical JSC - the operator of Vietnam’s first oil refinery Dung Quat), were among the top 10 stocks with most positive impact on the market.

The Monday session also witnessed positive trading of a series of industrial park stocks, with green covering trading codes like BCM, IDC, KBC, SZC, GVR, and SIP thanks to positive forecasts about the results of tariff negotiations.

In addition to the above highlights, red still dominated with up to 205 stocks declining and only 120 gaining. In the VN30 group, the number of stocks decreasing in price was 18; only 12 stocks rose.

Foreign investors have net sold for four consecutive sessions to the tune of over VND200 billion ($7.63 million), focusing on codes such as VCI, SHB, VNM, ACB, EIB, VPB, and KDH. On the contrary, VIC, VHM, FPT, GEX, and MWG were net bought.

Besides the Iran-Israel conflict, in the coming time, the results of tariff negotiations are probably the information that investors are most interested in.

Dao Hong Duong, director of stock and industry analysis at VPBank Securities, said that the market fluctuations in early April already reflected the worst scenario. "The figure after negotiations, from 10-46%, is better than 46%."

The next thing investors should pay attention to is Vietnam's average tax rate compared to other countries in the region, Duong noted.

Maybank Investment Bank said that this week, the market's eyes will be on the U.S., where a series of key economic data on inflation and growth will be released. These figures are of particular importance, as they appear in the context of new tariff measures from the Trump administration creating unpredictable fluctuations.

The U.S. economic picture is emerging with worrying colors, as both inflation and growth are sending out negative signals. The minutes of the Fed's meeting in June reinforced concerns about the possibility of high inflation along with slowing growth.

In particular, GDP forecasts for Q1/2025 showed a significant weakening, marking the lowest growth rate since the Covid pandemic. This situation poses a major challenge for the Fed in balancing monetary policy to both curb inflation and maintain economic growth momentum.

In addition, the last week of June has come and the picture of Q2 business results is gradually revealed. Most analysts recommend investors to look for stocks with good business prospects to "choose the right place to put their gold".

Some businesses will announce their estimated business results early before the official reports, and investors can follow to act early.