The VN-Index has experienced significant fluctuations recently, closing the last week of July with a notable increase. After a decline early in the week, the index rebounded to around 1,760 points, driven by strong demand from major stocks in sectors like Vingroup, banking, and retail. However, experts warn that this recovery may not signify the start of a major upward trend.

According to Nguyen Tan Phong, a securities analyst at Pinetree, the recent market recovery is supported by both domestic and international factors. Domestically, the second quarter financial reports have started to emerge, revealing a 25.6% increase in after-tax profits for 672 listed companies compared to the previous year. This positive outlook allows investors to evaluate companies based on actual performance rather than mere expectations.

Internationally, the U.S. Federal Reserve's decision to maintain interest rates between 3.5% and 3.75% has alleviated concerns regarding currency fluctuations and monetary policy. The liquidity on the HoSE has also returned to over 16 trillion VND, indicating a more active market as investors seek to capitalize on lower prices.

Despite the positive indicators, Phong cautions that the VN-Index's upward movement is occurring amidst skepticism. He predicts that the index will continue to fluctuate between 1,720 and 1,780 points, with potential volatility. The market is likely to focus on stocks with strong second-quarter performance, while those lacking fundamental support may struggle.

Bui Van Huy, CEO of FIDT, echoes this cautious sentiment, stating that the market has yet to establish a solid bottom for medium to long-term trends. He believes the recent movements resemble a technical rebound rather than the beginning of a significant upward trend. Huy advises investors to avoid equating a strong rebound with a complete trend reversal, as fluctuations of 5-10% are common during adjustments.

Looking ahead, both analysts agree that while the VN-Index may extend its recovery, the sustainability of this increase needs further validation. High-interest rates could pose risks to business operations and capital mobilization, particularly for companies with substantial financial leverage or upcoming debt obligations.

As the financial reporting season concludes and the market enters a quieter phase, investors are encouraged to use this recovery period to restructure their portfolios. Those holding lower-quality stocks or using high margins should consider reducing their positions as prices rebound, rather than waiting for stocks to return to their original values.

For medium to long-term investors, the outlook for Vietnam remains positive, bolstered by expectations of market upgrades, capital market reforms, and economic growth. However, in the short term, investors should prioritize the quality of earnings, cash flow generation, and the actual growth prospects of individual companies rather than chasing index movements.