Interest-rate easing cools the market outlook; expert identifies two main impacts on stocks

Recently, many commercial banks have collectively reduced deposit and lending interest rates, reversing the upward trend that had persisted since late 2025. The move has drawn market attention as investors look for signals that could support fresh liquidity.

Potential effects of rate cuts

Mr. Nguyen Trong Dinh Tam, Head of Investment Advisory for Individuals at Thiên Việt Securities (TVS), said the rate-cut trend may bring two main effects.

First, it could create a positive short-term psychological impact on interest-rate-sensitive stock groups, including residential real estate, construction, and securities.

Second, it may open room for some capital to return to the stock market, particularly as valuations of many stocks have become more attractive compared with the 5-year average after recent volatility.

Whether low rates can last

Mr. Tam noted that the current rate-cut trend may be temporary. The ability to sustain a prolonged period of low rates depends on multiple factors, including macro developments and banks’ capital-raising needs to support credit growth. This is set against an economy targeting about 10% GDP growth in 2026.

He also emphasized that the conflict in the Middle East remains a key factor influencing the stock market’s outlook. In the short term, however, the VN-Index’s movement is being supported by expectations of easing interest rates.

Another near-term catalyst: shareholder meetings and dividends

From another perspective, this year’s shareholder meetings have seen many companies announce positive growth plans alongside high dividend payouts. According to Mr. Tam, this could act as a short-term catalyst for stock prices, particularly when disclosed information exceeds initial expectations.

How investors can assess business plan feasibility

TVS experts advised investors to evaluate whether a business plan is truly feasible. Key considerations include the degree of plan completion in the past, whether growth can come from a low base, and macro variables that could affect corporate profits.

To gauge the profit outlook, investors should also track key variables influencing earnings trends. In particular, monitoring the trend of deposit and lending rates can help assess the trajectory of NIM (net interest margin), a crucial factor for evaluating the banking sector’s performance.

Portfolio guidance amid volatility

Against ongoing market volatility, Mr. Tam recommended a cautious approach. Specifically, investors can keep equity exposure at a maximum of about 60% of their portfolio, prioritizing stocks with low cost bases and those showing short-term uptrends. He said not increasing exposure beyond this level can help limit risk amid unpredictable external variables, especially geopolitical factors.

For investors holding a high cash position, he suggested gradually deploying capital during market pullbacks. The portfolio should favor sectors benefiting from the market’s upgrading narratives, as well as companies projected to have positive earnings growth in 2026.