The VN-Index experienced a significant drop of nearly 30 points, closing at just above 1,800 points, marking its steepest decline in three months. The index, which represents the Ho Chi Minh City Stock Exchange, showed slight gains at the start of the trading session but quickly turned negative and continued to widen its losses throughout the day.

At one point, the index plummeted nearly 50 points, reaching a low of 1,780 points, the lowest level in a month. However, during the closing price determination session, a wave of bargain hunting helped to narrow the decline to 28 points, while the VN30 index fell by 31 points.

This volatility at the beginning of the week aligns with predictions from various analytical groups, who suggest that the pressure for adjustment shows no signs of abating. Market liquidity has been dwindling, indicating that investors are waiting for clearer signals of recovery.

Moreover, escalating tensions between the U.S. and Iran have become a significant barrier to attracting investors back into the market. Analyst Nguyen Tan Phong from Pinetree Securities predicts that if the conflict continues to escalate, oil prices could surge to around $80 per barrel, reigniting global inflation concerns and potentially triggering a sell-off in emerging markets like Vietnam.

On the Ho Chi Minh City Stock Exchange today, over 260 stocks declined, outnumbering the gainers by five times. The large-cap stocks faced aggressive selling, with 27 stocks closing below reference prices compared to only three that increased. The banking sector experienced the most significant selling pressure, accounting for half of the ten stocks that negatively impacted the index. Only MSB managed to buck the trend, while others like SHB saw a substantial drop of 4.2%, closing at 12,600 VND.

Major stocks such as CTG, VCB, BID, and LPB also fell between 2.5% and 4%. The securities sector faced profit-taking after a strong week, with stocks like VIX, BSI, VDS, SSI, and VCI all losing over 3%. Some leading stocks even hit their lower limits with no buyers in sight.

The steel sector was not spared from negative impacts either, with HPG down 2.4%, while NKG and HSG dropped by 2.1% and 1%, respectively. Conversely, the oil and gas sector showed some signs of resilience, with OIL, BSR, GAS, and PVT closing above reference prices following a 4% increase in global oil prices.

Due to strong selling pressure, liquidity on the Ho Chi Minh City exchange rose to nearly 22 trillion VND, an increase of almost 5 trillion VND compared to the previous week. However, no stock reached a trading volume of 1 trillion VND. SHB and SSI topped the trading volume charts with around 900 billion VND each.

Following a round of buying last week, foreign investors returned to net sell, offloading over 2.1 trillion VND while their purchases fell short of 1.9 trillion VND. With the index likely to continue its downward trend, Vietcombank Securities (VCBS) has advised investors to temporarily reduce leverage to manage risk and to refrain from opening new positions. Traders are encouraged to wait for the market to establish a stable accumulation zone and for signs of a liquidity bottom before considering re-entering the market.