Stock market faces short-term correction pressure

Stock market faces short-term correction pressure

As the market enters a correction and consolidation phase, investors are likely to remain cautious in the coming week and the VN-Index may retest the key support level of 1,300 points, experts say.

An investor monitors the stock market. — Photo baotintuc.vn

Việt Nam’s stock market experienced a volatile trading week from March 24 to 28, with growing downward pressure, particularly in the final sessions. The VN-Index fluctuated within a narrow range before succumbing to selling pressure and losing several key support levels. Market liquidity also declined, reflecting increased investor caution.

Following a strong rally that pushed the VN-Index to a short-term peak around 1,340 points, the index has since reversed course. For the week, the VN-Index dropped by 0.33 per cent, closing at 1,317.46 points, still above the March 11 low of 1,315 points.

Head of Macroeconomics and Market Strategy at VNDirect Securities Corporation Đinh Quang Hinh said that the likelihood of a deeper decline below this level is limited, as concerns over trade tariffs have largely been priced in the recent correction.

Notably, Việt Nam has recently taken proactive measures to mitigate the risk of punitive tariffs from the United States. These include the signing of trade agreements with the US worth up to US$90 billion, as well as a proposal to lower import duties on items including automobiles, ethanol, liquefied natural gas (LNG), agricultural products and timber — all aimed at helping rebalance trade relations with key partners.

“The direct impact of tariffs on the stock market remains limited, as export-related stocks account for only a modest share of the major indices. Therefore, I believe the risks and impact of tariffs may be somewhat overstated,” Hinh said.

According to Hinh, if the VN-Index sinks back to the 1,300-point support zone, it would offer an attractive entry point for medium- to long-term investors, particularly in sectors with strong 2025 outlooks such as banking, securities, residential real estate, electricity, and public investment.

Looking ahead, Hinh believes the rest of the year will bring several tailwinds for the stock market, including attractive valuations, improved earnings prospects, the rollout of the KRX trading system, and potential upgrades in market classification.

Việt Nam’s stock market has been under sustained correction pressure over the past week, especially during the last three sessions, driven by intensifying tariff concerns.

“On March 26, the United States raised import tariffs on automobiles to 25 per cent, a tenfold increase, effective from April 2. This sent global auto stocks tumbling and further dampened already fragile investor sentiment amid a prolonged trade conflict. Moreover, on April 2, the US is expected to announce retaliatory trade measures against 15 countries with high tariffs and trade surpluses — Việt Nam may be among those impacted,” Hinh noted.

Head of Analysis at Saigon-Hanoi Securities Phan Tấn Nhật echoed this view, stating that the VN-Index is exiting a strong upward cycle and entering a correction and accumulation phase.

“As we close March and the first quarter, the market is entering a crucial stage — updating company fundamentals as Q1 earnings are released, while also re-evaluating macroeconomic conditions. Additionally, markets are awaiting further information on potential new tariffs expected in April,” Nhật said. 

Bizhub