The Vietnamese stock market just witnessed one of its most significant crashes in recent history, with the VN-Index plunging by nearly 95 points and the VN30 Index shedding more than 106 points. What mysterious forces brought the market’s months-long rally to a screeching halt?

A historic downturn

On October 20, Vietnam’s stock market (VN-Index) experienced a historic decline. By the end of the trading session, the index dropped by 94.76 points (-5.47%), settling at 1,636.43.

This drop was even sharper than the nearly 88-point plunge seen in early April when former U.S. President Donald Trump announced retaliatory tariffs on a wide range of global exports. At the time, Vietnam faced a proposed tariff rate of 46%.

However, following that initial blow, Vietnam’s stock market staged a spectacular rebound-surging over 50% from 1,100 points in April to above 1,700 points by mid-October. Vietnam benefited from being one of the few countries to reach an early tax agreement with the U.S.

After months of gains, signs of reversal began to appear on October 17, when many major stocks, including those in the influential Vingroup ecosystem chaired by billionaire Pham Nhat Vuong, started to retreat. The VN-Index fell by 35 points in that session.

The announcement by the Government Inspectorate about violations related to bond issuance and use by certain banks, real estate firms, and retailers further unsettled investor sentiment in a market valued at around USD 300 billion.

Even though Vingroup subsidiaries were not named in the list, its key stocks-VIC (Vingroup), VHM (Vinhomes), VPL (Vinpearl), and VRE (Vincom Retail)-all suffered steep declines.

On October 20, the market showed signs of stabilization in the morning, but at 2 p.m., selling pressure unexpectedly surged. Hundreds of stocks, including blue-chip VN30 members, fell to their daily floor limits. The VN-Index lost nearly 95 points by session’s end.

Over the past two sessions combined, the index has fallen by 130 points and is approaching the 1,600-point threshold.

During October 20’s session, all 30 blue-chip VN30 stocks declined, with 13 hitting their floor prices. The banking, securities, steel, and retail sectors faced the most pressure.

Techcombank (TCB) dropped VND 2,800 to close at VND 37,850 (USD 1.53) per share. VPBank (VPB) lost VND 2,200, closing at VND 29,750 (USD 1.20). Shares in MBBank (MBB), HDBank (HDB), SHB, Sacombank (STB), TPBank (TPB), and VIBank (VIB) also hit floor limits.

Other major companies such as Masan (MSN), SSI Securities (SSI), Hoa Phat Group (HPG), Vietnam Rubber Group (GVR), and Vincom Retail (VRE) also tumbled. Vingroup (VIC) dropped by VND 9,100 to VND 194,900 (USD 7.89), while Vinhomes (VHM) lost VND 8,000 to close at VND 108,000 (USD 4.37).

This downturn comes despite robust capital inflows into the market. So, what halted the rally of a USD 300 billion market? And what lies ahead for this key fundraising channel for the economy?

Two major shocks in quick succession

While the drop on October 17 was largely triggered by concerns over bond market violations, investors on October 20 were spooked by interest rate worries.

Recent gains in Vietnam’s stock market were driven by abundant capital, low interest rates, strong macroeconomic performance, and impressive corporate earnings. Domestic cash inflows outweighed foreign capital outflows, fueling a 50% surge in stock prices over just a few months.

Earlier, experts had warned that the market could reverse once monetary policy shifted. However, those warnings pointed to changes in late 2026 or 2027, as the government continued to target high credit growth and economic expansion.

Investor anxiety intensified when the overnight interbank lending rate spiked to 5.75% on October 16.

The back-to-back steep declines could trigger more aggressive profit-taking and margin calls, dragging the market down further.

Could this lead to a prolonged sell-off like the one in 2022?

According to Luu Chi Khang, Director of Research at CSI Securities, the sharp two-day fall could indeed trigger margin calls. The pressure remains real.

However, Khang believes the market is unlikely to crash as it did in 2022.

That year, Vietnam faced a full-blown bond crisis that rippled through the financial system. Real estate firms issued bonds aggressively and misused proceeds. Securities firms distributed these bonds, while banks offered guarantees and collateralized lending to developers. These widespread violations led to intense selling pressure.

Today’s situation is different. Vietnam’s GDP growth is strong, with targets of over 8% in 2025 and double digits by 2026. The government is ramping up public investment, and the stock market is on track for an upgrade in classification.

Thus, a 2022-style meltdown is unlikely.

CSI experts also note that the market had already risen sharply in 2025, so a correction was expected and may not be as shocking. The financial system is more stable. Even if interest rates rise to stabilize exchange rates, and authorities tighten oversight to ensure bank loans are used properly-for economic growth, manufacturing, and public investment-it could ultimately benefit the economy.

Manh Ha