US tariff policies expected to drive market in coming weeks

Analysts view last week's downturn as a necessary adjustment within the broader uptrend, as the market enters a cooling down phase following a sustained period of growth.

The domestic stock market closed a bumpy trading week, marking its most substantial correction in nearly a month after a prolonged rally.

Analysts view this downturn as a necessary adjustment within the broader uptrend, as the market enters a cooling down phase following a sustained period of growth.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index dropped nearly 36 points compared to the previous week, closing at 1,495.21 points, thereby breaking below the psychologically significant 1,500-point threshold.

Throughout the week, the VN-Index reached new heights but subsequently plummeted by 64 points, resulting in a weekly fluctuation range of 78 points. Despite the steep decline, market liquidity remained remarkably high, indicating that capital flows are still robust.

According to Saigon - Hanoi Securities Company (SHS), after nearly four months of consecutive price increases, including six weeks of significant surges, the market has entered its first correction phase.

Notably, July 29 saw a record trading volume of 2.7 billion shares, with a transaction value nearing VNĐ72 trillion (US$2.7 billion) on the HoSE.

In total, the weekly trading value on the southern bourse reached VNĐ243.8 trillion, up 31.6 per cent from the previous week, averaging over 1.8 billion shares traded per session.

However, the market breadth tilted heavily towards declines, with increased selling pressure in previously hot sectors such as retail, technology, telecommunications, aquaculture, agriculture, steel and real estate. While securities and maritime transport stocks maintained upward momentum for most of the week, they also faced substantial selling pressure on the final trading day.

Foreign investors were net sellers, offloading shares worth VNĐ4.75 trillion on HoSE, primarily targeting large caps like SSI Securities Corporation (SSI), Vietinbank (CTG), FPT Corporation (FPT) and Hoa Phat Group (HPG).

SHS noted that if the VN-Index fails to hold the support level at 1,480 points, the short-term uptrend may come to an end.

Meanwhile, the HNX-Index on the Hanoi Stock Exchange (HNX) finished the week at 264.93 points, up 10.37 points from the previous week.

In addition to internal factors, the market has also been influenced by new tariffs imposed by US President Donald Trump, ranging from 10 per cent to 41 per cent on imports from various countries, alongside an additional 40 per cent tariff on transshipment goods to prevent tax evasion. Specific regulations regarding product origins are being finalised and are expected to be issued in the coming weeks.

Phu Hung Securities Company (PHS) said that the new US tax policy has raised concerns about costs and risks for Vietnamese exporters. In this context, the market has exhibited clear differentiation, with cautious capital flows focusing on fundamentally strong stocks.

According to PHS, the market's hesitance is clear with trading volumes falling below the 20-day average.

A positive sign is that profit-taking in appealing stocks has not led to widespread negative sentiment, while some large-cap stocks are beginning to rebalance at mid-term support levels.

However, for a recovery to be established, the VN-Index needs to surpass and maintain above 1,525 points. If the index continues to consolidate below this level, correction pressures may push it down to the 1,460–1,470 point range.

Experts from Saigon - Hanoi Securities JSC (SHS) predict that the market will enter a phase of accumulation and adjustment as second-quarter earnings reports are released and short-term supportive factors dwindle.

The new tariff policies are expected to directly impact corporate profit prospects starting late in the third quarter, necessitating a reassessment based on macro-economic factors and industry outlooks.

The developments in Việt Nam's market are not isolated, mirroring a global wave of corrections as worldwide equities have sharply declined in response to concerns over US employment data and new tariff policies from the White House.