Market Strategy October 2026 – Selective Accumulation Ahead Of A New Recovery

Market Performance: VN-Index corrects, breaking below the 1,780 support level

Following a strong recovery in August, the VN-Index corrected in September, falling to 1,768.62, down 3.5% MoM. The correction came amid rising selling pressure, weaker liquidity and increasingly cautious investor sentiment. Key factors weighing on the market in September included:

• Profit-taking after the strong August rally: The VN-Index gained nearly 100 points in August, triggering increased profit-taking in September. Meanwhile, expectations of FTSE reclassification had been partly priced in, limiting further upside momentum in the short term.
• Foreign investors turned net sellers: Following the completion of FTSE-related transactions, foreign capital quickly reversed into net selling, adding pressure on large-cap stocks and overall market sentiment.
• Fed rate hike: The Fed’s 25-bp rate hike to 3.75–4.00% increased the relative attractiveness of USD-denominated assets, reducing the appeal of risk assets in emerging markets.
• Elevated oil prices heightened inflation concerns: Geopolitical tensions kept oil prices elevated, increasing input cost pressures and inflation risks while reinforcing expectations of a prolonged high-rate environment.
• Unfavorable domestic rates and liquidity conditions: Deposit rates remained under pressure amid strong credit demand to support the double-digit economic growth target, while weaker market liquidity limited the market’s ability to absorb increased selling pressure

Investment compass for October: Selective accumulation ahead of a new recovery

• The Vietnamese stock market is likely to remain volatile in October as liquidity has yet to improve and investor sentiment remains cautious amid external uncertainties.The VN-Index may continue to test and consolidate around lower support levels as selling pressure and portfolio rebalancing are gradually absorbed. However, downside risks are expected to remain contained, supported by positive earnings prospects in 2H26 and valuations that have corrected to attractive levels. Accordingly, corrections toward strong support levels could present opportunities for selective accumulation ahead of a potential recovery in 4Q26. We recommend considering gradual accumulation as the VN-Index consolidates around 1,700–1,730, with a focus on companies with strong fundamentals, positive earnings growth prospects, healthy liquidity and the potential to attract institutional capital

Based on technical indicators and fund-flow developments, we identify two scenarios for the market in October:

• Bottoming and consolidation (Base case): The VN-Index holds the 1,716–1,730 support zone and trades within the 1,720–1,800 range, assuming the Fed keeps interest rates unchanged. The 3Q26 earnings season is expected to provide strong support. A weekly close above 1,800 could confirm a short-term bottom and open the way for a rebound toward 1,830–1,860.
• Further correction scenario: If the Fed raises interest rates by another 25bps in October, continued net selling by foreign investors could put further pressure on the market, pushing the VN-Index below its August low and toward 1,650–1,660. However, discounted valuations and positive 3Q26 earnings prospects should help limit the downside.

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