Market opens March with cautious optimism amid pressure for correction

Market opens March with cautious optimism amid pressure for correction

Investors are advised to maintain their current portfolios while waiting for opportunities to increase positions during any market corrections.

Investors observe stock movements at a trading room of a securities firm. — Photo baochinhphu.vn

Following a strong post-Tết (Lunar New Year) trading week, Việt Nam’s stock market enters March with a mix of enthusiasm and caution, as signs of corrective pressure emerge after two consecutive weeks of gains.

Last week, the benchmark VN-Index on the Hochiminh Stock Exchange (HoSE) closed at 1,880.33 points, up 3.1 per cent from the previous week. This increase propels the domestic stock market into the top ten performing markets globally for the week.

On the Hanoi Stock Exchange (HNX), the HNX-Index was last traded at 262.82 points. For the week, it gained 2.24 per cent. 

Investor sentiment remained positive after the Tết holiday. The index surged a remarkable 36 points on its opening day, setting a bullish tone for the week. However, as the VN-Index approached the psychological threshold of 1,900 points, profit-taking pressure intensified, leading to a contraction in gains, particularly by Friday's session.

Liquidity emerged as a bright spot, reflecting a noticeable resurgence of capital flow into the market. The average trading value on the HoSE reached over VNĐ31.2 trillion (US$1.2 billion), up 33 per cent from the previous week and exceeding the 20-week average by approximately 7.5 per cent.

For the week, trading volume totalled around 949 million shares, an increase of 20.92 per cent, indicating a swift return to active trading dynamics post-holiday.

Foreign investors recorded significant net selling during the week, totalling over VNĐ4.7 trillion, a stark increase compared to the pre-Tết period. 

In a positive turn toward the end of the week, foreign investors returned to net buying, purchasing over VNĐ180 billion.

As the market resumes following the Tết break, notable international developments are also shaping investor sentiment. 

The US Supreme Court's decision to limit the use of the 1977 IEEPA statute for imposing tariffs has added uncertainty to global trade, especially for major economies. Additionally, the ongoing conflicts between Iran and the US are anticipated to influence energy stocks this week.

Domestically, the Government's push to accelerate key infrastructure projects, such as Long Thành Airport and highway systems, continues to bolster the outlook for construction, materials and infrastructure stocks.

Looking ahead, global markets will focus on key economic data releases, including February employment reports from the US, as well as PMI, retail sales, inflation and unemployment metrics from the Eurozone.

Analysts from Vietnam Construction Securities Corporation (CSI) said that while the VN-Index finished the week in positive territory, the pressure to sell is prevalent among many stocks, as 201 stocks declined compared to just 124 that rose. 

Increased liquidity, with trading volume exceeding the 20-day average by 7.1 per cent, suggests the index lacks momentum for a breakout and may face corrective phases after two weeks of continuous gains. 

Though the VN-Index tested the psychological level of 1,900 points, it has yet to decisively overcome this barrier.

CSI maintains a moderately optimistic medium-term outlook, predicting the index may pull back towards support around 1,830 points before resuming its upward trend. 

Investors are advised to maintain their current portfolios while waiting for opportunities to increase positions during any market corrections.

Experts at Thien Viet Securities (TVS) suggest that the VN-Index will likely need to consolidate within the 1,850-1,900 range to absorb selling pressure in upcoming sessions. 

They view the 1,900-1,920 points zone as a solid resistance level and advise investors to keep a balanced position while closely monitoring market developments. 

Bizhub