What dirivers for the Vietnam stock market?

Vietnam’s stock market has seen index points “evaporate” and many stocks move into a corrective phase. Still, the decline has had a more muted psychological impact than in several other markets, supported by positive sentiment and expectations for oil and energy shares, along with related sectors such as fertilizers, chemicals and seaports. In addition, some brokerage stocks are still enjoying a “tailwind” from the market-upgrade review process, which begins this March.

VN-Index regained ground after two steep down sessions thanks to a handful of heavyweight stocks, even as many names continue to trade at discounted valuations.

While some Asian markets such as Thailand and South Korea temporarily halted trading after broad-based selloffs triggered circuit breakers, Vietnam’s market posted a slight gain on March 4. Even so, alongside bottom-fishing demand, investors have become more cautious. This is a period when investors are tracking developments in the Middle East conflict as well as market price action, waiting either for a clearer recovery signal or for opportunities in stocks that have sold off sharply.

According to analysts at Maybank Investment Bank Vietnam (MSVN), in most conflicts the path to early de-escalation depends on third-party intervention and pressure to bring the parties to negotiations. In the absence of external pressure, the trajectory of the war largely depends on the belligerents themselves.

MSVN believes the conflict is increasingly likely to last longer than the optimistic scenario of under four weeks, while still not disrupting the Strait of Hormuz. Energy markets are beginning to price in a prolonged conflict, with some forecasts suggesting crude could rise above $120 a barrel—a level typically associated with a global economic crisis.

In MSVN’s view, prices holding above $85 a barrel would already create meaningful inflation pressure, forcing central banks globally to reassess their rate paths and currency stability. For Vietnam, this would imply prolonged pressure on the exchange rate, followed by interest-rate pressure, raising recession risks.

The U.S. administration has strong incentives to prevent oil prices from spiraling, and may use tactical measures such as naval escorts through Hormuz—similar to Operation Earnest Will in 1986–1987. President Donald Trump has said he is prepared to do so. A scenario in which the conflict drags on for another three to four months alongside such measures is plausible.

“The market is correctly pricing the risk of a prolonged war, but expectations for oil to remain at $100–$120 a barrel are excessive. At those levels, demand destruction and recession dynamics would ultimately push prices lower. Energy stocks—especially oil & gas and fertilizers—are benefiting from speculative rallies, while the broader market continues to discount the risk of a drawn-out conflict,” the analysts said.

Against that backdrop, MSVN argues that as valuations reset lower, opportunities will emerge—similar to the sharp swings seen during the 2020 COVID shock. For investors, this could be the most important trading window through September 2026.

On oil-price impacts, Vietcap notes that risk lies not only in transportation but also directly in supply—even if the volume impact may not be large. Iran currently produces roughly 3% of global oil supply, and in an escalating conflict, not only Iranian oil but also the extraction and export infrastructure of nearby countries could be affected, increasing concerns over short-term supply disruption.

“However, if disputes are gradually brought under control and production and shipping return to normal, the risk premium will be stripped out of oil prices. The market would likely see a significant correction from current elevated levels. In that case, oil and gas stocks that have surged mainly on sentiment and short-term expectations could face clear downside pressure,” Vietcap analysts cautioned.

In a more optimistic scenario, Vietcap still expects oil prices to stabilize once tensions ease. And crucially for oil-and-energy shares—now seen as one of the market’s key “engines”—analysts say that benefiting from a Middle East-driven oil rally is only part of the story; the other part is domestic fundamentals.

Specifically, Vietcap points to additional drivers from internal factors and domestic policy.

First, Resolution 70 on energy security and Resolution 79-NQ/TW reaffirm the strategic role of state-owned enterprises in foundational sectors such as energy and oil and gas, bolstering longer-term confidence in the sector’s investment strategy and operating performance.

At the same time, the upstream investment cycle is clearly recovering, reflected in PVN stepping up investment in early 2026 and crude output rising again after years of decline—supporting growth expectations for oilfield services and oil-and-gas infrastructure firms.

In addition, there are expectations that a decree establishing special mechanisms for PVN will be issued, while a new decree on petroleum trading—allowing distributors greater autonomy within the pricing mechanism—is also improving profit outlooks for downstream companies.

Finally, some firms delivered impressive profit growth in the fourth quarter of 2025.

“Higher oil prices can have a positive and direct impact on earnings prospects for oil and gas stocks. However, the market also appears to be overreacting in some names, where prices have risen faster than the near-term improvement in underlying business performance. We think part of the current rally is expectation- and speculation-driven, and should be monitored closely to avoid correction risk when sentiment cools,” Vietcap’s analysts emphasized.