Market trend hard to predict after difficult week
The local market remained hard to predict as price movements have been sensitive and showed no certain trends, said analysts and brokerages.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange dropped 0.28 per cent to close Friday at 974.08 points.
The index had lost 1 per cent last week.
On the Ha Noi Stock Exchange, the HNX-Index was down 0.05 per cent to end Friday at 100.92 points, totalling a weekly loss of 1.37 per cent.
An average of more than 191.4 million shares was traded in each session of last week, worth VND4.1 trillion (US$176 million).
The market is in its correction phase as worries about the global economy have triggered stronger foreign selling in recent weeks, putting more pressure on the Vietnamese market, said Le Duc Khanh, director of market strategy department at PetroVietnam Securities (PSI).
Investors should keep a careful watch over the market as it was in negative shape and was too dependent on international developments, he said.
According to BIDV Securities Company (BSC), the unfavourable news has partly made the market fluctuation stronger.
The trade war is intensifying, the US and China are adjusting regulating policies to limit the damage but also creating a risk of confrontation on other fronts, BSC said in its report.
After more than a year and many rounds of talks, the negotiations were still deadlocked and the severity of retaliation against each other was expanding. The political motivation integrated into the trade war is unpredictable. This continues to be a risk not only for the global economy but also for Viet Nam's economy in the near future, BSC said.
Viet Nam is likely to stay in the FTSE Russell watch-list. Earlier, in March, FTSE Russell kept Viet Nam in the watch-list to upgrade to Secondary emerging market but downgraded some criteria compared to the previous review in September 2018.
ETFs FTSE and VNM will also restructure their portfolios of stocks in the third quarter. Portfolio restructuring activities, though, will also create fluctuations, especially when the trading time and maturity term of future contracts coincide, BSC said.
The market will welcome the third quarter business results in the second half of September, but this is not yet a breakthrough when negative information from the global market is still ahead, the company forecast.
In September, BSC proposed two scenarios for the benchmark VN-Index. In the positive case, the VN-Index will remain above 965 points in the correction p, with the central price zone of 980 points. Price movements welcomed the third quarter business results, improved liquidity in some sectors and stocks with good growth prospects.
In the negative case, the VN-Index may drop below 950 points if there is adverse information from the world and foreign investors net sell.
According to Bao Viet Securities Company, next week, the VN-Index is forecast to experience some corrections and recover toward market close.
The VN-Index will receive support from the 970-point zone, where the market would possibly recover. However, the index could also drop to a deeper support zone 955-960 points if 970-point zone is violated. The market is expected to move sideways with alternative ups and downs together with a wide divergence among stock groups.