Why Vietnam's Stock Market Limits Daily Price Swings to 7%: How It Compares Globally

Vietnam’s stock market enforces a daily price fluctuation limit—7% on the HOSE exchange—to ensure market stability and control risk. But why is this limit necessary? Is Vietnam the only country with such a rule? While major global markets like the U.S., UK, and Japan allow free price movement based on supply and demand, Vietnam maintains a daily “price cap.” This article explores the underlying reasons for Vietnam’s 7% limit, including investor psychology, market maturity, and the absence of advanced risk-hedging tools. We also compare this mechanism with how international markets manage volatility. If you’re curious about how Vietnam protects its stock market and why such limitations are still in place, this article offers a comprehensive, clear, and fact-based explanation.