Money-flow Trend: Are Positive Signals Enough to Support the Market?

The Q1 2026 GDP growth rate of 7.83% points to continued macro stability, even as March CPI rose to a five-year high. Next week, FTSE will publish its mid-year review, which could upgrade the market and support an optimistic outlook.

At the same time, geopolitical tensions in the Middle East are rising. In a March 2 speech, President Donald Trump delivered a hardline message and warned that the 10-day deadline for Iran to reopen the Hormuz Strait has only 48 hours left.

Cause: Geopolitical risk meets a more stable information environment

Analysts said markets had anticipated heightened tensions, and the market has already absorbed declines while valuations have discounted a substantial portion of negative news. They also noted that access to information has become more stable, which may reduce the likelihood of overly panicked reactions compared with earlier episodes.

Global markets reacted only modestly to Trump’s March 2 remarks, a response that was seen as foreseeable given the firmer tone and increased near-term policy uncertainty. Domestically, the latest sessions also showed a correction, attributed to recalibrated expectations and data rather than a systemic liquidity breakdown.

Development: Volatility likely, but a repeat of late-March panic seen as less likely

Several analysts argued that near-term risk is mainly psychological and informational rather than a structural shift in money flow or liquidity conditions. As a result, the market may continue to swing and correct in the short run, but the probability of a deep, broad-based drop similar to March 20–23 is not high unless stronger policy shocks or wider macro risks emerge.

One view emphasized that the market has already experienced multiple dips and that leverage has been lower, which could limit the spread of any “unwinding squeeze.” Another view added that a sharp correction would become more likely if hardline statements are followed by concrete actions or if tensions escalate further.

Data and market levels: VN-Index support and resistance

After VN-Index retreated from around 1,900 to below 1,600 during the correction phase, technical levels are being closely watched. Near-term support is cited around 1,650–1,670, aligned with the 200-day moving average. Resistance is seen around 1,720–1,740.

Analysts also noted that the index is currently influenced by a small set of large-cap stocks, while most sector trends and money flow have weakened. If selling pressure increases, a test of the 1,650–1,670 zone could occur; if that area breaks, the 1,600 region would become a key downside reference.

While the risk of testing the 1,600 support is considered real, analysts said it is not an immediate threat unless external shocks materialize—such as a geopolitical spillover that pushes energy prices higher and fuels inflation, global liquidity tightening faster than expected, or broad deterioration in macro data.

Impact: Oil price dynamics and inflation transmission

Oil price movements are highlighted as a key driver. With Brent around $110 per barrel, the backdrop is described as favorable for energy stocks, but returning to oil exposure should be selective. Some flagship oil stocks rose prematurely in early March and have since corrected.

Higher oil prices can feed into domestic fuel prices, affecting inflation and production costs. These factors may influence energy security and macro stability, with potential spillovers into manufacturing, export activity, tourism, FDI attraction, and financial markets—ultimately shaping listed companies’ earnings prospects.

In the near term, analysts said oil and energy stocks are moving more with overall market direction than leading as before, because much of the positive pricing from supply disruptions and geopolitical tensions has already been reflected. They suggested that fresh entries should wait for clearer confirmation signals, such as a stable price base or a breakout supported by convincing liquidity.

Analysis: “Re-pricing expectations” and what to watch next

In the coming week, the market is expected to enter a phase of “re-pricing expectations” as Q1/2026 macro data is released. However, most current data are viewed as reflecting only the initial phase of the Middle East shock due to economic lags.

Immediate impacts are expected to show up in energy price indices, CPI, and the trade balance. Broader propagation is expected to appear later through leading indicators such as PMI, new export orders, and corporate inventories.

Inflationary pressure from higher oil and transport costs could push CPI higher and influence expectations for monetary easing. If PMI weakens or stays around 50 while export growth slows, it would suggest manufacturing exposure to supply chain disruptions and weaker external demand. Credit growth relative to deposits is also cited as important, since a high cost of capital and weak credit demand could prolong recovery.

Despite these risks, analysts said regional concerns remain manageable for now and do not justify a broad market shock. They expect reactions to tilt toward dispersion and prudence rather than a widespread correction.

Outlook: Valuation support if the market stabilizes

Technically, VN-Index is described as range-bound after the March rebound, with potential tests near 1,650–1,670 and resistance at 1,720–1,740. A test of the 1,600 floor remains possible if oil prices rally further, Hormuz tensions persist, or margin debt stays high.

In a more positive scenario, the 1,600 level is described as an attractive valuation area, with P/E around 11–12x, which could support value investing and capital inflows.