Core Viewpoint - The sudden sell-off in the Vietnamese stock market on July 29 was primarily driven by foreign investors cashing out after a period of strong market performance, leading to significant declines in major indices and sectors [2][6][10]. Group 1: Market Performance - On July 29, the Ho Chi Minh Index (VN Index) experienced a drop of 4.11%, closing at 1493.41 points, while the VN30 Index fell by 4.38% to 1621.29 points [3]. - The VN Index reached a historical high of 1566.74 points earlier that day, marking a 45.9% increase from its low in early April [5][7]. - The trading volume surged to nearly 14 trillion VND within the first hour, causing some brokerage systems to malfunction due to high demand [5]. Group 2: Causes of the Sell-off - The primary reason for the market decline was the aggressive selling by foreign investors, who net sold over 9390 billion VND in the morning session alone, focusing on large-cap stocks that had previously supported the index [6]. - The market's high valuation, with a price-to-earnings ratio around 15 times, has raised concerns about overvaluation, as corporate profit growth has not kept pace with stock price increases [6]. - Investors are reportedly increasing their leverage, with some brokerage firms reaching their margin limits, which could restrict further price increases in the short term [6]. Group 3: Economic Context - The Vietnamese economy showed strong growth, with a GDP increase of 7.52% in the first half of the year, the highest for the same period since 2011 [9]. - Foreign investors had net bought over 400 million USD in Vietnamese stocks in July, marking the second consecutive month of inflows, contrasting with outflows from other Southeast Asian markets [9]. - The potential reclassification of Vietnam in the FTSE index could attract up to 6 billion USD in capital inflows, further influencing market dynamics [9].