Liquidity remains unstable as stocks face continued headwinds in Q2 2026

Liquidity remains unstable, and equities continue to face difficulties in the second quarter. Kafi Securities says the improvement in liquidity is not yet strong enough to confirm that capital inflows have returned sustainably, meaning the market likely needs more time to consolidate and test near key resistance levels.

Medium-to-long term outlook and technical picture

Kafi Securities assesses that the market has formed a peak range in the medium-to-long term around 1,900 points. The market is expected to rebound after a large correction in March, but breaking above the price level formed at the start of the year is expected to be challenging.

Technically, the VN-Index formed a near-term balance around 1,570–1,600 points following a sharp Q1 correction. Positive technical signals—positive divergence and MACD turning higher—support the groundwork for a rebound.

Entering early April, the index rose on broad-based gains, with liquidity above MA20. This reinforced the floor and expanded the rebound toward the 1,780–1,800 range, with potential to exceed 1,800.

Geopolitical risks and oil-market constraints

Geopolitical risks in the Middle East are expected to take time to reach final negotiations. While the impact has moderated and expectations have not widened, disruption delays remain substantial even if a complete ceasefire is approved.

CSIS estimates that fully restoring oil and gas infrastructure and ensuring safe passage through Hormuz will take at least six months. The system remains short by about 12 to 14 million barrels per day, which is putting upward pressure on global crude prices and shipping costs.

Kafi expects world oil prices to average 80–90 USD per barrel for the year.

Global monetary policy and inflation headwinds

In this uncertain environment, Kafi expects the global monetary easing cycle to be slower and less aggressive than previously expected. As a result, policy rates are not yet conducive to a strong expansion of asset valuations.

Heading into Q2 2026, the global macro picture is described as entering a stagnant phase, with limited maximum monetary policy space to support growth. Higher rates in major economies are also expected to pressure capital outflows from developing economies.

Disinflation faces headwinds from rising energy prices and supply chain disruptions. March data show producer prices (PPI) in major economies surged again: US +0.6% and Europe +0.8% month-on-month, driven by energy price increases of more than 60% in a quarter. This is expected to slow the decline of core inflation and leave policymakers with limited options.

Policy stances are mixed across regions: the Fed, ECB, and UK BoE are holding rates and pausing planned rate cuts to guard against inflation risk. Meanwhile, the BOJ and the RBA continue to tighten. The BOJ signals a hawkish stance and is expected to raise rates from mid-year, while the RBA has already increased rates by 50 basis points in the first quarter.

The focus is on the impact on oil, inflation, and financial conditions, raising concerns about global stagflation risk.

Vietnam outlook: inflation, FX pressure, and policy constraints

In Vietnam’s base case, inflationary pressures in the near term complicate price control efforts and may force the central bank to delay easing. The economy is also facing FX pressure from a rising DXY, along with inflation volatility due to energy price swings.

However, the State Bank of Vietnam is expected to maintain flexible liquidity management and not pivot toward higher policy rates. The room for monetary loosening remains constrained, and credit growth in real estate remains under pressure. This is partially offset by momentum from major policy groups, capital market development, and the FTSE upgrade story.

Market strategy and expected trading range in Q2

Given the macro uncertainty and the still-fragile liquidity picture, Kafi recommends maintaining a safe equity allocation, prioritizing defensive sectors, and focusing on stocks with investment theses supported by clear policy backing.

Investor sentiment is described as cautiously optimistic, supported by expectations of de-escalation in geopolitics and positive news on upgrade plans. Still, because liquidity improvement is not yet sufficient to confirm sustainable capital inflows, the market is expected to consolidate and test resistance levels.

In the base case, the VN-Index is expected to test the 1,800+ level in Q2, but with oscillations within a 1,600–1,800 band. Kafi frames this as a necessary basing period after a sharp correction, involving reaccumulation, cash reallocation across sectors, and absorption of supply at higher price levels.

The phase is expected to lay the groundwork for a market status upgrade expected to begin in Q3 2026, when capital flows may improve more clearly and guide the trend.