A test for the VN-Index and strategic catalysts in March

Amid the Middle East conflict, Vietnam’s stock market has fallen nearly 70 points over the past two sessions, pushing the VN-Index below 1,800 points. However, this decline is also viewed as a test of the VN-Index’s medium-term upward structure.

Holding cash during periods of market exuberance does not necessarily mean missing opportunities; rather, it can be a way to preserve resources for portfolio reallocation during technical shakeouts.

If tensions in the Middle East ease, the narrative around Vietnam’s stock market upgrade could become the most important driver for the VN-Index.

Nguyen Xuan Thinh, an analyst at VNDirect, noted that the VN30 index is weakening faster than the VN-Index due to the lack of a “buffer” from oil and fertilizer stocks. The 1,930–1,950 point range for the VN30 is considered a critical defensive zone. If this level is breached, the current rebound structure could break down, potentially pushing the market into a short-term downtrend.

Meanwhile, matched trading liquidity exceeding VND 80 trillion over the two most active sessions suggests a shift in market flows. A large volume of shares has been absorbed at discounted price levels, implying a transition from panic selling by retail investors to buying from institutional investors and those with a longer-term outlook.

Across the market, capital flows are increasingly diverging between sectors. Companies that benefit directly from higher oil prices and supply chain disruptions—such as PetroVietnam Gas (GAS), Binh Son Refining and Petrochemical (BSR), and Gemadept (GMD)—have recorded positive performance. However, the pattern of rising trading volumes without corresponding price increases near peak levels suggests a short-term distribution risk that investors should watch closely.

“Meanwhile, banking and securities stocks have already corrected by about 15–20% from their peaks. Current valuations are approaching deep discount levels, particularly as foreign investors continue to maintain net buying in leading stocks. This is a tactical accumulation zone rather than an area to avoid entirely due to concerns about a ‘value trap,’” Thinh said.

From a more optimistic perspective, Yuanta Vietnam Securities forecasts that the market may see a rebound in the next session. However, the VN-Index could continue to move sideways around its 20-day moving average with relatively low trading volumes in the coming sessions. The short-term trend of the broader market remains neutral.

Looking ahead two to three weeks, VNDirect expects that if tensions in the Middle East cool down, the potential upgrade of Vietnam’s stock market to emerging market status by FTSE Russell could become the most significant catalyst for the VN-Index.

The review is scheduled to take place in March, with results expected to be announced on April 7, 2026. Expectations surrounding a new trading system and the introduction of T0 settlement are viewed as direct catalysts for brokerage stocks, which tend to benefit from higher liquidity and increased ETF inflows.

A common strategy around market upgrade events is to “buy the rumor, sell the news.” Therefore, sharp corrections driven by geopolitical factors may open medium-term accumulation opportunities in banking and securities stocks, which carry significant weight in major indices.

Providing short-term recommendations, Nguyen The Minh, Director of Research at Yuanta Vietnam, suggested investors should rebalance their portfolios while maintaining equity exposure of around 40–50%. He also advised focusing on trends within individual sectors to build portfolios that are adaptable to the current environment, while avoiding chasing oil and gas stocks in the short term.

The year 2026 has begun with heightened risks but also presents rare valuation discounts. If the Middle East conflict is contained in the near term and the market upgrade process proceeds as expected, the VN-Index may still have room for a meaningful recovery. Ultimately, the difference between professional investors and a panicked crowd often lies in patience, discipline, and the ability to identify the right defensive positions during the market’s most volatile moments.