Caution ends market’s short recovery
Caution ends market’s short recovery
Rising caution among investors about poor general market conditions put an end to a short-lived recovery on Tuesday.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange ended at the new 16-week low of 888.69 points after having risen as much as 0.67 per cent during the session.
The southern market index had fallen total 8.52 per cent since October 18 to hit 888.82 points on Monday.
The HNX Index on the Ha Noi Stock Exchange gained 0.54 per cent to close at 101.72 points, ending its previous six-day loss of total 6.41 per cent.
The northern market index narrowed its growth from its intraday highest increase of 1.68 per cent.
After enjoying a slight recovery in the morning and early afternoon periods, local stocks soon faced selling pressure from investors.
“The market was quiet today while trading liquidity kept declining,” Sai Gon-Ha Noi Securities JSC (SHS) said in its daily report on Tuesday.
Nearly 171 million shares were traded on the two local exchanges, worth VND3.44 trillion (US$153 million).
The trading figures recorded on Monday were around 171 million shares in volume and VND3.63 trillion in value.
“It proves investors are getting discouraged and disappointed with the general conditions of the market,” SHS said.
Sellers were holding on to their stocks while “buyers showed increased caution after they had fallen into a bulltrap four times in October,” the brokerage firm added.
Unwillingness of both buyers and sellers to join market trading resulted in a balanced market breadth with 212 gaining stocks and 227 declining ones.
Banking and securities stocks, which drove the market up in the morning session, grew slower in the afternoon and finished at lower prices.
Other industries that are seen as main pillars of the market like food and beverage and real estate underperformed.
The large-cap VN30 Index also lost steam, closing down 0.04 per cent at 874.06 points after having gained as much as 0.85 per cent during the day.
A short-lived recovery of the market helped it stay above the support level of 885 points and that could be positive signal at the moment, SHS said.
Other positive signs for the market included foreign investors ending as net buyers, posting VND222.4 billion. They were net sellers on Monday with VND19 billion worth of net sales.
“However, external factors such as the move of US stocks, news on China-US trade tension and the strength of foreign currencies will remain the risks for the Vietnamese market,” it said.
On Wednesday, the VN-Index is forecast to drop further and test its nearest support level of 885 points, according to SHS.
