Vietnam's Markets Swing From Panic to Hope: Navigating Trade Tariffs and Investor Sentiment

The Vietnamese stock market’s volatile week in early 2025 laid bare the fragility of emerging economies in the face of geopolitical shocks—and the resilience of investors when calm returns. After a 6% plunge triggered by U.S. tariffs, the rebound was as swift as the sell-off, with the VN-Index surging nearly 7% in two days. But beneath the headline moves lie critical lessons for investors about valuation, liquidity, and the interplay of global trade policy with domestic fundamentals.

The turmoil began on April 2 when U.S. tariffs of up to 46% on Vietnamese exports sent shockwaves through the market. The VN-Index, which had already been under pressure from foreign selling, dropped 8.1% by midweek, hitting a 14-month low. Margin calls and liquidity spikes—HoSE traded $1.58 billion in a single session—amplified the rout. Yet the rebound, fueled by a 90-day tariff delay and rate cuts to 10%, showcased the market’s pendulum swings between panic and optimism.

The Catalyst: Trade Policy as a Black Swan

The U.S. tariffs targeted Vietnam’s booming exports, which grew 15% in 2024, making it the ninth-largest trading partner with the U.S. Sectors like seafood (a $2.2 billion industry) and wood products faced immediate risks. reveal the scale of outflows: $1.58 billion in Q1, plus another $250 million in early April. This capital flight exposed Vietnam’s reliance on foreign liquidity, a vulnerability that could resurface if trade talks falter.

The rebound, however, was driven not by fundamentals but by policy relief. President Trump’s tariff delay reduced immediate risks, allowing retail investors to buy beaten-down stocks. By April 10, 318 stocks hit daily ceilings, with the VN30 Index surging 6.9%—a rare all-blue-chip rally. Yet liquidity dropped 85%, highlighting supply constraints as sellers dried up.

Sector Split: Winners and Losers

Not all industries felt the pain equally. Exports-heavy sectors like industrial real estate and seafood plunged, but domestic plays—transport, fertilizers, and utilities—held up better. would show this divergence: seafood stocks like Minh Phu dropped 18%, while infrastructure firm Masan rose 12%. This split underscores Vietnam’s dual economy: one tied to global trade, the other rooted in local demand.

Analysts at VinaCapital noted that tariff-driven corrections had already priced in risks, with valuations hitting decade lows. The VN-Index’s P/E ratio fell to 11x—below its five-year average of 14x—creating opportunities in consumer staples and tech.

The Technicals: Recovery or False Dawn?

The market’s technicals suggest a short-term bounce, not a sustained rally. The VN-Index’s rebound to 1,222 points closed a critical gap below 1,200 but left unresolved gaps at 1,160 and 1,255. Volume dried up during the rally, a warning sign. Meanwhile, foreign investors—net sellers for six straight months—turned buyers briefly, purchasing $974 million in shares like steelmaker Hoa Phat (HPG) and insurer Bao Viet (BVH). Yet their return could be fleeting if trade talks sour again.

The Bottom Line: A Buying Opportunity—or a Trap?

Vietnam’s market offers a classic “crisis = opportunity” scenario. Domestic GDP growth of 6.5% in 2024, pending reclassification to emerging-market status by FTSE Russell, and reforms like the 2025 capital market law argue for resilience. The $700 billion capitalization recovery by April 11 suggests investors see value in companies like Vinhomes (VHM), whose dividend yield hit 6% during the slump.

But risks remain. A failure to resolve U.S.-Vietnam trade tensions could reignite selling, while domestic inflation (up to 3.2% in Q1) tests the State Bank’s ability to cut rates further. Investors should focus on companies with strong domestic ties—retail banks, e-commerce, and healthcare—rather than export-reliant firms.

In the end, Vietnam’s markets are a microcosm of emerging markets’ challenges: vulnerable to external shocks but primed for growth when stability returns. The 6% drop and rebound prove that in this environment, patience—and a focus on fundamentals—are the ultimate safeguards.

Conclusion
Vietnam’s stock market rollercoaster in early 2025 underscores the precarious balance between global risks and domestic potential. While the tariff-driven sell-off exposed vulnerabilities—foreign capital dependence, sector imbalances—the rebound highlighted the market’s capacity to rebound when policy uncertainty eases. With valuations at decade lows and domestic growth intact, long-term investors can find bargains in companies like Masan Group (MSN) or VPBank (VPB), which offer 7%+ dividend yields.

Yet caution is critical. The unresolved tariff issue and lingering foreign selling mean volatility will persist. Investors should allocate modestly to Vietnam, using dips below 1,200 points as entry points, while avoiding export-heavy stocks until trade talks conclude. The market’s 700-trillion-VND recovery is a start—but the road to stability remains bumpy.