VN-Index faces selling pressure as it nears 1,000 points

Viet Nam’s benchmark VN-Index reversed paths and declined on Friday, showing that selling pressure begins to increase as the index approaches the 1,000-point milestone.

 

The benchmark VN-Index on the Ho Chi Minh Stock Exchange dropped 0.48 per cent to close at 992.45 points.

The southern market index had gained a total of 3.15 per cent over the past seven trading days since August 13.

Nearly 163 million shares were traded on the southern bourse, worth VND3.87 trillion (US$167.3 million).

Dragging the southern market down were insurers, real estate developers, brokerage firms, retailers, energy, banking, agriculture businesses, rubber producers and food and beverage firms.

Those sector indices were down by between 0.4 per cent and 2.3 per cent each, data on vietstock.vn showed.

Pillar stocks suffered selling pressure included Vingroup (VIC) (-1.1 per cent), Vinhomes (VHM) (-0.9 per cent), Vietcombank (VCB) (-0.9 per cent), Vinamilk (VNM) (-0.5 per cent) and Vincom Retail (VRE) (-0.5 per cent).

Seafood stocks such as Minh Phu Seafood Corporation (MPC), Hung Vuong Corporation (HVG), Camimex Group JSC (CMX), Vinh Hoan Corporation (VHC) maintained their momentum and gained. HVG even hit the daily limit of 7 per cent, but the group's gains were not enough to support the overall market.

On the US stock market, major indices such as the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average did not change much, moving by -0.05 per cent, -0.36 per cent and +0.19 per cent, respectively.

Later on Friday, the chairman of Federal Reserve (Fed) Jerome Powell would give a speech at the Fed's annual conference in Jackson Hole, Wyoming to central bank officials and economists.

“According to economic experts, there is a split in the Fed between the officials who need more signs of economic deceleration to lower interest rates and those who want to take measures early to protect the US economy against the disadvantages from the slowdown of the global economy,” Bao Viet Securities Company (BVSC) said in its daily report.

The strategists said that the more Fed members disagreed, the more worried the market would be about unpredictable monetary policy. Thus, investors would be more convinced that the Fed might fail to prevent a recession from happening, the company said.

Notably, the yield curve between two-year and 10-year US treasury bonds reversed several times in the past week. Therefore, investors were expecting a balanced view from Powell, and possibly an interest rate reduction to prevent risks or if the US economy weakens, it added.

On the Ha Noi Stock Exchange, the HNX-Index ended Friday down 0.24 per cent at 103.25 points.

The northern market index had rallied a total of 1.80 per cent in the previous five trading days.

More than 21 million shares were traded on the HNX on Friday, worth VND258.6 billion.

The stock market also saw large-cap firms performing poorly on Friday.

The blue-chip VN30-Index lost 0.08 per cent to end at 900.53 points.

Foreign investors net sold nearly VND220 billion on the HOSE, including shares of Vietjet Air (VJC) (VND76.4 billion), Vincom Retail (VRE) (VND45.8 billion) and Vinamilk (VNM) (VND39 billion). Foreign investors also were net sellers on the HNX with the value of VND8.73 billion.

According to BVSC, next week, the VN-Index is forecast to move between the support zone of 975-980 points and the resistance zone of 1,000-1,005 points. The index is expected to continuously face correction pressures to fall to the resistance zone around 985 points early next week.

Stock divergence would be present by stock group and even stock sector. Investors should also pay attention to oil and bank stocks. Money could flow to stocks of industrial zones, farming and fishing, BVSC said.

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