VN-Index forecast to keep upward trend

VN-Index forecast to keep upward trend

The VN-Index on the Ho Chi Minh Stock Exchange soared 1.68 per cent to close Friday at 1,015.59 points.

It was the strongest gaining session the VN-Index had witnessed since March 12, when the index exceeded the 1,000-point mark for the first time this year to close at 1,001.32 points.

The index totalled a gain of 1.91 per cent last week.

An average of 215 million shares was traded on the southern bourse per session last week, worth VND4.2 trillion (US$180 million).

According to Duong Van Chung, Director of the North branch at MB Securities, the trading session on Friday played a decisive role in leading the trend of the market from now until the Lunar New Year.

Chung said the VN-Index had experienced many failures when trying to conquer the 1,000-point landmark, which has negatively affected the psychology of investors.

After the booming session on Friday, investor sentiment has improved significantly and cash flow has come back to the market, Chung told news site tinnhanhchungkhoan.vn.

“In terms of technical analysis, we believe this session will serve as momentum to push the VN-Index nearer to the 1,100-point level before the Lunar New Year,” he said.

Chung expressed his optimism of the likelihood the market would grow continuously for the next two to three months.

The market is now strongly supported by macroeconomics stability. In the third quarter, Viet Nam’s GDP growth recorded a nine-year high. The US Federal Reserves’ decision to cut interest rates and the constant reduction of interest rates among the central banks around the world also spells good news for the global stock markets and the Vietnamese stock market, according to Chung.

According to Bao Viet Securities Co (BVSC), the VN-Index is expected to enter an uptrend toward resistance zone of 1,035-1,045 points very soon.

“In a shorter term, the index will possibly head toward the resistance zone of 1,019-1,024 points next week,” BVSC said.

“However, the index may encounter a throwback to 1,000-1,006 point range before continuing its uptrend.”

Cash flow is forecast to improve while foreign investors’ net buy is expected to increase after FED’s interest rate cut. Large-cap and bank stocks will possibly dominate the market. Cash flow is expected to rotate among stock sectors to support the market’s uptrend.

If the 1,000-1.004 resistance zone is penetrated, the market may experience some short volatility, which is a good opportunity for investors to buy new or cover previously sold positions, according to BVSC.

Nguyen Trung Du, Director of the Business Development Section at VNDirect Securities Co said the flourishing of VN-Index on Friday dispelled market gloom and cautious sentiment that had lasted for the whole of the previous month.

Members of the “Vin” family, Vingroup (VIC), Vinhomes (VHM) and Vincom Retail (VRE), reported impressive gains and pushed up the indices.

VHM soared 11 per cent last week and contributed more than nine points to the rise of VN-Index.

Du said improved liquidity and a vibrant trading would bring cash flow back to the market and open up many short-term trading opportunities while the positive context of the international stock market will support the Vietnamese market in the next trading week.

According to Nguyen Hong Khanh, head of market analysis at Viet Nam International Securities Joint Stock Company (VIS), the market is in the recovery period and this is the best time to purchase stocks.

“There will be some correction sessions, but the overall market trend from now until the end of the first quarter of next year is growing,” Khanh said.

“Banking and retail will be more attractive than other sectors,” he said.

On the Ha Noi Stock Exchange, the HNX-Index rose 0.53 per cent to end Friday at 105.75 points.

The northern index gained a total of 0.99 per cent last week.

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