VN-Index underperforms in region after Middle East shock, ranking 11th

Vietnam’s VN-Index fell 10.9% in March 2026 versus February, ranking 8th among 13 tracked markets. The decline came as a broad oil-price shock was triggered by Iran closing the Hormuz Strait, hitting energy-import dependent economies hardest. Northeast Asian markets were among the most affected, while Malaysia (-1.5%) and Singapore (-2.2%) were less impacted due to their net oil and gas export positions.

Market performance across regions

In March, the VN-Index’s performance was still ahead of Korea’s stock index (-19.1%), Indonesia (-14.4%), the MSCI Emerging Markets index (-13.3%), Japan (-13.2%), and India (-11.3%), but behind the Philippines (-10.0%).

Year-to-date, the VN-Index is down 6.2%, slipping from 6th/13 (end-February) to 11th/13, ahead only of India (-14.5%) and Indonesia (-18.5%). Korea remains the top performer with +19.9%, followed by Thailand (+15.0%) and Singapore (+5.1%). The United States also moved into negative territory (-4.6%), suggesting energy risk and inflation pressures weighed on a wider set of markets beyond developing economies.

Volatility and trading conditions

According to VnDirect, monthly volatility reached about 16% (1,580–1,880 points), the highest level since the COVID-19 period. The move reflected a panicked sell-off combined with margin calls in the first half of the month, before buying activity helped the market rebound from its support area.

March also marked a shift toward a more defensive positioning. High-beta sectors, large-cap stocks, and areas dependent on foreign capital flow (Technology, Real Estate, Banking) faced the strongest selling pressure. By contrast, sectors sheltered in funds benefiting directly from geopolitical developments (Insurance, Chemicals) saw comparatively less pressure.

Liquidity remained robust despite the drop

Average trading value in March 2026 reached 33.9 trillion dong per session, up from 31.8 trillion in February, even as the VN-Index fell 10.9%. This indicates liquidity stayed strong, supported by both panic selling and “bottom-fishing” demand.

By exchange, liquidity rose on HoSE (+5.4%), surged on HNX (+23.8%), and increased on UPCoM (+6.7%). HNX stood out for inflows into mid- and small-cap groups, including oil, chemicals, and securities.

VnDirect described the pattern as a phase of “panic selling”: margin calls and selling pressure in large-cap groups dominated the first half of the month, while the latter half saw bottom-fishing return, with a focus on oil-related stocks and defensive stocks. Turnover also remained elevated year-on-year, pointing to continued market participation amid volatility and ahead of FTSE Russell upgrade results expected in early April 2026.

Deposit rates rise as banks adjust funding costs

The 12-month deposit rate continued to rise in March 2026, with sharper increases at state-owned banks and large private banks, indicating a broader upward trend across the system. The state-owned group recorded the largest increase to 5.9% (+0.7 percentage points), followed by large private banks (+0.5 percentage points). Smaller private banks rose by only 0.1 percentage point.

The average 12-month deposit rate across commercial banks increased to 5.9% from 5.4% in February 2026. VIB, OCB, and VPB remained among the highest. Between 06/03/2026 and 02/04/2026, 11 banks raised rates, with TCB increasing the most (+1.7 percentage points) and LPB the smallest (+0.2 percentage points). Rate dispersion remained wide, reflecting differences in funding needs, liquidity conditions, and lending-growth strategies across banks.

Valuation signals and investor flows

The VN-Index’s earnings yield (E/P) averaged 7.3% in March 2026 as the index fell about 6% month-on-month. The spread between the VN-Index earnings yield (E/P) and the 12-month deposit rate remained positive in March, though it narrowed compared with the first three quarters of 2025 due to higher deposit rates.

Individuals continued to add to positions, with net buying of 2.2 trillion dong.