Market expected to remain volatile this week

Market expected to remain volatile this week

The VN-Index may fluctuate around the 1,880-1,920 range, lacking sufficiently strong momentum for a decisive breakout but also unlikely to fall sharply due to ongoing bottom-fishing demand.

An investor conducts a transaction at a securities firm trading office in Hà Nội. — VNA/VNS Photo

The market benchmark VN-Index extended its rally for a seventh consecutive week, although analysts warned that geopolitical uncertainties and a lack of fresh domestic catalysts could make the market more volatile in the weeks ahead.

The VN-Index, representing the Hochiminh Stock Exchange (HoSE), closed the first trading week after the holiday break at 1,915.37 points, up 3.3 per cent from the previous week. 

At one point, the benchmark touched a new all-time intra-day high of around 1,924.95 points, before experiencing mild profit-taking pressure during Friday's session.

The recovery marked a sharp rebound from the late-March bottom near 1,600 points and placed Việt Nam among the world's top 15 best-performing stock markets over the past week and three months.

Market momentum continued to be driven primarily by large-cap stocks, particularly the Vin pair of Vingroup (VIC) and Vinhomes (VHM). However, analysts noted that cash flow rotation between sectors has become increasingly evident.

According to experts at CSI Securities, when VIC and VHM temporarily lost dominance in terms of index contribution during Friday's correction, capital quickly shifted into banking shares, helping stabilise the market.

"The market immediately found a replacement leadership group, with banking stocks standing out during Friday's session," CSI analysts said.

Despite the broader gains, analysts said many investors still experienced what has become known locally as a 'green outside, red inside' market condition, where the benchmark index rises strongly while a large portion of stocks either decline or underperform due to the rally being concentrated in a small group of heavyweight shares.

Liquidity remained another positive factor during the week. Average trading value on the market reached nearly VNĐ19 trillion (US$722 million) per session.

Analysts from VCBS Securities said stronger buying demand on May 7 helped push the market to the record 1,924.95-point level, reflecting improving investor confidence.

However, foreign investors continued to maintain heavy net-selling activity, creating pressure on market sentiment.

Nguyễn Tấn Phong, an analyst at Pinetree Securities, said persistent foreign outflows showed that overseas investors remained cautious despite expectations surrounding Việt Nam's potential FTSE market upgrade.

Foreign investors net sold a total of VNĐ4.25 trillion across the market during the week. 

Looking ahead, investors are expected to closely monitor geopolitical developments in the Middle East, which continue to influence oil prices, inflation expectations and global financial market sentiment.

Internationally, US inflation data, speeches by Federal Reserve officials, the process of appointing a new Fed chair and economic indicators from China, Europe and Japan are also expected to shape global capital flows in the coming weeks.

Last week, easing tensions in US-Iran negotiations and cooling oil prices supported positive sentiment across global markets. However, analysts cautioned that geopolitical risks remain unpredictable and could trigger sharp short-term fluctuations.

At the same time, Việt Nam's stock market is entering what analysts described as an information vacuum period following the end of annual shareholder meetings and the first-quarter earnings season.

"If negotiations produce positive outcomes, oil prices may continue cooling down. On the contrary, if tensions escalate again, inflationary pressure and market sentiment could be significantly affected," Phong said.

He also maintained a cautious outlook, saying the 'green outside, red inside' situation would likely persist, while prolonged foreign net selling could continue weighing on investor psychology.

According to the analyst, the VN-Index may fluctuate around the 1,880-1,920 range, lacking sufficiently strong momentum for a decisive breakout but also unlikely to fall sharply due to ongoing bottom-fishing demand.

Meanwhile, CSI Research said market gains in recent weeks has not been evenly distributed across sectors, and advised investors not to abandon fundamentally strong stocks simply because of short-term index fluctuations.

The firm maintained its recommendation to hold existing portfolios and selectively accumulate shares during market consolidation phases, focusing on companies with strong earnings prospects in the coming quarters.

From a technical perspective, analysts at Saigon - Hanoi Securities (SHS) said the VN-Index is continuing to head toward the historic resistance zone of 1,900-1,920 points, while the VN30 is approaching the 2,100-2,120 range.

Although SHS has yet to officially forecast a breakout above these resistance levels, the securities firm said banking stocks could provide the momentum needed for the market to surpass previous peaks. 

Bizhub