VN-Index amid tariff shock: Time to test investment mettle

The fear that permeated the stock market during the trading session on April 3 caused a widespread sell-off, negatively impacting most industries, inadvertently causing the market to overreact.

US President Donald Trump announced higher tariffs on dozens of countries with trade surpluses with the US on the afternoon of April 2 (early morning of April 3, Vietnam time), with Vietnam among the countries subject to the highest reciprocal tariffs - up to 46%. This information caused the stock market to suffer from huge selling pressure right from the beginning of the April 3 session.

Only 13 stocks remained green while 517 stocks on HoSE decreased in price, with 282 hitting the floor. The market was dominated by blue and red, with all industry indexes recording a decrease of nearly 7%. The VN-Index lost nearly 88 points, or 6.68%, to 1,229.84 points, wiping out all gains in the past two months. This was also the sharpest decline in the history of Vietnam's stock market.

Huge selling pressure causes VN-Index to drop the most in history

The fear of “slow sales” caused investors to rush to sell from the beginning of the session regardless of whether the business’s industry was affected by tariffs or not, showing that excessive sentiment was taking place in the market. On the morning of April 3,FPT quickly issued a statement that “FPT is not affected by the new US tax policy”, but the company’s reaction was not enough to have an impact, FPT shares were still sold at the floor price and decreased to the limit.

Stocks of domestic enterprises from real estate, banking, consumer… were all dumped, showing that the herd mentality is dominating the market. Investors are selling no longer based on fundamental analysis but mainly fear of short-term losses.

In fact, shortly after President Trump’s announcement of the new tariffs, US Treasury Secretary Scott Bessent told Bloomberg that US trading partners should exercise restraint and wait for negotiations. “This is the highest tariff without retaliation,” Mr. Bessent said.

The White House said the 10% tariff will take effect from April 5 while higher tariffs will take effect from April 9. So with the US leaving the possibility of negotiations open, Vietnam has time to change.

“In the current situation, there are still real bright spots for investors to rely on,” affirmed Mr. Truong Hien Phuong - Senior Director of KIS Vietnam Securities Company.

Besides the fact that Mr. Trump has expressed his sympathy for Vietnam through visits and investments in Vietnam, Mr. Truong Hien Phuong also believes that Vietnam's ability to negotiate and negotiate can adjust the tax rate from the US.

The current stock market is oversold due to investors' concerns and panic, not because of business problems. If a business has a serious decline in business results, losses or bankruptcy, then investors will have a reason to sell off, but the current selling is only based on temporary psychology, so investors will soon calm down, reduce excessive stress and limit the selling momentum, Mr. Phuong said.

In terms of technical analysis, the market on April 3rd has fallen to the floor, the market will have some recovery sessions. The selling pressure gradually decreases when the bottom-fishing demand returns, creating opportunities for investors who are holding cash and taking profits before. Especially when the price zone falls into a particularly attractive zone, the P/E index becomes extremely attractive, attracting investors with a tendency to invest for the medium and long term and experienced investors.

The senior director of KIS Vietnam commented that the initial information only shows 46%, investors should calmly wait for more specific information, especially when the Government and ministries will have a solution to negotiate for the US to loosen the tariff.

“When investors carefully choose investment stocks, they choose good stocks with clear business plans and development strategies. In the coming time, the corporate shareholders' meeting season will also specifically discuss the dividend payment level, upcoming development projects, etc. and other positive information is waiting. Therefore, we have no reason to sell off good stocks because of unclear early information. This is hasty and unnecessary,” Mr. Truong Hien Phuong recommended.

This expert also mentioned the upcoming big event that the Ho Chi Minh City Stock Exchange (HoSE) will officially put the KRX system into operation. This is almost the final stop to upgrade the Vietnamese stock market in the review period next September, thereby attracting many investment funds in the world to come and disburse into Vietnam. "At that time, this new cash flow will find good stocks in the market. If investors rush to sell following the crowd, they will both lose good stocks and suffer losses when accepting to sell at a loss. But I still believe that the reality is not that serious, new signals will reverse the market in the near future."

The VN-Index’s record drop was a big test for investor sentiment, but also a reminder that the stock market is not just driven by news but also by the intrinsic value of businesses. Vietnam remains a promising economy, and short-term fluctuations cannot erase the market’s long-term prospects.

Information from the Government and ministries also shows that Vietnam is making efforts to improve the situation.

Immediately after the tariffs were announced, the Prime Minister chaired a meeting of the Government Standing Committee with ministries and branches to assess the situation and discuss immediate and long-term solutions. The Prime Minister directed a number of comprehensive, harmonious, reasonable and effective measures, both immediate and long-term, with the US side, to promote balanced and sustainable trade relations, facilitate investors on both sides, and ensure the legitimate and legal rights and interests of relevant entities...

The Prime Minister also requested the immediate establishment of a rapid response team on this issue headed by Deputy Prime Minister Bui Thanh Son; assigned Deputy Prime Minister Ho Duc Phoc to chair and direct ministries and branches to listen to opinions from businesses, including large export enterprises.

The Finance Ministry meeting on the same day also said that according to the most recent report of the US Trade Representative, the average tax rate of Vietnam on US export goods is 15%, much lower than the 90% level stated by the US. The Finance Ministry is continuing to research, clarify, and persistently discuss and find solutions to balance trade, bringing benefits to both sides.

According to Deputy Minister Nguyen Duc Chi, this weekend, representatives of the Vietnamese Government will visit the US to discuss this issue. Hopefully, the level announced by the Trump administration is the maximum level, the specific number will be given after the two sides discuss solutions.

Source: https://baodautu.vn/vn-index-giua-cu-soc-thue-quan-thoi-diem-kiem-chung-ban-linh-dau-tu-d261968.html