Market to remain volatile on short-trading week

Market to remain volatile on short-trading week

Investors may consider cautiously establishing positions at 1,700 points but should remain aware of possible fluctuations around the 1,710-point mark before a clearer recovery trend develops post-New Year's holiday.

Traders work at a trading office of a securities firm in Hà Nội. —VNA/VNS Photo

The Vietnamese stock market closed last week on a bumpy note. Despite increasing selling pressure near peak levels, the VN-Index recorded weekly gains, supported by large-cap stocks and bottom-fishing activities from investors.

Notably, foreign investors continued their net buying trend for the second consecutive week.

Throughout the week, foreign investors purchased a net total of 39.3 million shares, amounting to nearly VNĐ1.6 trillion (US$59.6 million), which is 8.5 times the previous week’s figure.

The week began positively with the VN-Index climbing in the first three sessions, reflecting a notable improvement in market sentiment. However, caution prevailed as trading volume exhibited a lack of broad participation, mainly concentrated in leading sectors like real estate.

As the index approached sensitive levels, profit-taking intensified, leading to a sharp decline in the final two sessions.

Particularly, on Thursday, the VN-Index surged past its historic peak but quickly reversed course, plummeting over 60 points by the end of the session due to significant selling pressure within the Vingroup stock group.

Friday saw the VN-Index open with a gap down of more than 30 points, breaching the psychological level of 1,700 points. However, strong buying support emerged towards the end of the session, allowing the index to recover and maintain its position above 1,700.

By the end of the week, the VN-Index climbed 25.49 points to close at 1,729.80, marking the second consecutive week of gains.

The fluctuations throughout the week resulted in a noticeable improvement in market liquidity. The average daily trading volume on the HoSE reached approximately 914 million shares, a 27 per cent increase from the previous week, with a trading value of over VNĐ28.3 trillion, up 33 per cent.

In terms of sector performance, oil and gas stocks led gains with a 6.15 per cent increase, followed by residential real estate at 4.23 per cent, retail at 3.83 per cent, insurance at 1.83 per cent and banking at 1.27 per cent.

Conversely, the chemicals sector faced downward pressure, decreasing by 7.41 per cent, followed by construction (-2.67 per cent) and industrial real estate (-2.47 per cent).

Analysts from Pinetree Securities indicated that while the VN-Index posted a weekly increase, the significant volatility in the final sessions has made short-term trends difficult to ascertain.

The Vin stock group is likely to remain a key factor influencing the index in the final trading week of the year.

BETA Securities suggested that investors adopt a defensive strategy, avoiding chasing prices during recoveries and gradually allocating funds into stocks that attract stable inflows while maintaining a reasonable cash ratio.

Meanwhile, the Vietnam Construction Securities Company (CSI) noted that the support level around 1,700 points is proving effective.

Investors may consider cautiously establishing positions at this level but should remain aware of possible fluctuations around the 1,710-point mark before a clearer recovery trend develops post-New Year’s holiday. 

Bizhub