After a relentless four-month climb and a particularly exuberant six-week run with surging liquidity, the VN-Index unexpectedly reversed course as it approached the historic 1,550-point peak. For the trading week ending August 1st, the market’s main index fell sharply to 1,495 points, a 2.35% drop from the previous week’s close.
What should small investors do as the VN-Index falls sharply?
Profit-taking pressure mounted in the last two sessions, causing many stock groups to plunge. Sectors such as retail, technology and telecommunications, seafood, agriculture, steel, and real estate were not spared from the correction wave.
Some groups managed to hold their ground for most of the week, including securities and maritime transportation stocks.
However, by the week’s final session, selling pressure had spread, causing many tickers to lose value. Market liquidity hit a record high during the past week, with an average trading value of nearly VND49 trillion per session. Meanwhile, foreign investors surprised the market by net selling over VND4,750 billion on HoSE in just one week.
VN-Index falls sharply after a consecutive rise in recent months
After a robust buying spree in July, foreign investors unexpectedly changed course in recent sessions. On July 29th, precisely when the VN-Index touched the 1,550-point mark and the market was at its most vibrant, foreign investors offloaded stocks with a net value of over VND880 billion.
“I noticed that the market had been surging strongly for several days, but foreign investors kept net selling. They sold over VND4,000 billion in just the last two sessions. I’m not sure if this indicates an imminent sharp correction in the market,” shared Tran Khanh, an investor from Ho Chi Minh City.
Following the Smart Money Trail
However, experts advise investors to take a more objective view of foreign investors’ actions. At a recent stock talk show hosted by NLD, Le Huu Thoai, Director of Online Customers Division at Rong Viet Securities Company, emphasized that foreign investors’ moves should not be considered the sole guideline for individual investment strategies.
Foreign investors net sold over VND4,700 billion in the stock market last week
Mr. Thoai cited that in the first six months of the year, foreign investors had net sold up to VND40 trillion but quickly net bought VND11 trillion in early July. Despite being net sellers overall, the VN-Index continued to hit new highs. This indicates that foreign investors’ actions should only be considered a reference rather than a decisive factor.
However, dubbing foreign capital as “smart money” is not entirely unfounded. According to analyses from several securities companies, when the VN-Index was still in the range of 1,280-1,300 points, foreign investors had already started buying aggressively. And just two weeks after the index surpassed the 1,400-point mark, they poured in an additional VND11 trillion – a net buying level that reflects their decisiveness and sensitivity to market trends.
Mr. Vo Diep Thanh Thoai, Head of Premium Clients Division at DNSE Securities Company, shared that there was a time when the market hitting the 1,400-point mark was likened to “chasing the peak” due to aggressive foreign buying. But in reality, the VN-Index later surpassed the 1,500-point threshold, demonstrating the strategic approach of foreign capital in navigating the market.
According to Mr. Thoai, investors should not overly focus on absolute point levels like 1,400 or 1,500, as this can create an unrealistic sense of “high” or “low.” It is more important to monitor which sectors and stocks foreign capital is favoring and make decisions that align with the overall trend rather than merely reacting to short-term news or fluctuations.
Expert Insights: Market Correction Likely, Strategize to Seize Opportunities in Select Stock Groups
Investors are advised to exercise caution and refrain from impulsive buying. A sensible strategy would be to reduce exposure in stocks that have experienced sharp surges.
What to Expect After the Wild Stock Market Swings?
The stock market is experiencing a lull as the VN-Index once again falters at the 1,500-point mark. Profit-taking pressures are mounting, while supportive news is drying up. Analysts suggest that the market may be entering a phase of accumulation and differentiation, with investors reassessing prospects for the second half of the year.
The VSDC Chair on the Implementation of T+0, Selling Securities Pending Settlement, and Trading Through Lunch
“Regarding intraday trading and the selling of securities on a cash basis, the legal framework is clearly outlined in Circular 120/2020/TT-BTC. Our leadership team assures us that the functional system integration into the KRX platform is also well underway.”
“Technical Analysis for August 4th: Proceeding With Caution”
The VN-Index and HNX-Index both climbed, while trading volume dipped compared to yesterday’s morning session, indicating investors remain cautious.
Vietstock Weekly 04-08/08/2025: Profits Taking Pressure Intensifies
The VN-Index stalled in its upward trajectory last week as trading volumes hit an all-time high, indicating significant profit-taking pressure. The index is currently retesting the old peak from April 2022 (1,480-1,530 points) while the Stochastic Oscillator has signaled a sell-off within the overbought territory. Investors should be cautious of the potential for further corrections if the indicator exits this zone in the coming period.
