Can VN-Index regain its footing after steep decline?

Dip-buying returns, yet market trend remains uncertain

The VN-Index may face less immediate selling pressure after last week’s sharp decline, as bargain hunters have begun returning and several technical indicators point to the possibility of a short-term rebound.

Nevertheless, analysts say the recovery remains fragile and the market has yet to establish a clear direction.

The benchmark index closed last week at 1,686 points, down 101 points, or 5.7 percent.

Huynh Anh Huy, head of sector research at Kafi Securities, said the index fell to 1,668 points during the July 22 session, its lowest level since early April, before rebounding as dip-buying emerged in several large-cap stocks.

The recovery showed that bargain hunters had started re-entering the market after four consecutive sessions of steep losses, he added.

At the same time, technical indicators such as the Relative Strength Index (RSI) and Money Flow Index (MFI) had entered oversold territory, suggesting the market had fallen too sharply over a short period and could be poised for a technical rebound.

However, Huy cautioned that a single rebound session was not enough to confirm that the VN-Index had bottomed out.

The market would need further confirmation through sustained buying demand and a clear improvement in liquidity.

The analyst said that following the announcement of the U.S.’s new tariff policy, the market’s focus had shifted from the tariffs themselves to assessing their impact on individual groups of companies.

If the effects prove no worse than expected, the market could stabilize relatively soon. However, export-dependent sectors such as textiles and garments, seafood and furniture may remain under pressure as investors reassess their earnings outlook.

Meanwhile, the second-quarter earnings season is also revealing a clear divergence among companies.

Several securities firms have continued to deliver strong profit growth, while many property developers and companies in sectors under market pressure have reported weaker results.

Huy said stronger capital inflows would be more likely to return once investors had fully assessed the impact of the new tariffs and gained a clearer view of second-quarter earnings.

From a valuation standpoint, Vo Van Huy, senior client director at DNSE Securities, said the VN-Index was trading at a price-to-earnings (P/E) ratio of around 10 times when the influence of Vingroup stocks was excluded.

He said that if the market fell another 5-15 percent, stock valuations could drop to levels seen during major market crises, such as the 2025 tariff shock, the 2022 liquidity crisis and the COVID-19 downturn in 2020.

Rather than trying to predict the exact market bottom, Huy advised investors to focus on risk management by reducing margin borrowing, maintaining sufficient cash and waiting for clearer signs of stabilization before increasing their exposure.

Recovery hopes rise, but risks linger

According to ACB Securities, trading volume rose during market declines but weakened during rebounds, indicating that sellers remained dominant while dip-buying demand was not yet strong enough to produce a clear shift in market direction.

The brokerage expects the VN-Index to retest the 1,650-point support level before showing more convincing signs of stabilization.

SSI Securities, meanwhile, said the 1,650-1,660-point range continued to provide support.

Momentum indicators have begun to improve, and if this zone holds, the index could extend its technical rebound toward 1,700-1,720 points.

Tien Phong Securities offered a more positive outlook but noted that liquidity remained below the 20-session average, indicating that investors were still cautious.

The VN-Index also continued to trade below key resistance levels.

The brokerage expects the short-term rebound to continue, with the nearest target at around 1,770 points.

However, it stressed that the move would still be a technical recovery rather than the start of a stronger uptrend, as the medium-term outlook had yet to improve significantly.