Market likely to continue relying on pillar stocks this week

Market likely to continue relying on pillar stocks this week

The VN‑Index continues a 'green on the outside, red in the core' pattern, moving roughly within 1,850–1,890 as a few pillar stocks keep the index steady.

A trader talks to an investor at a trading office of a securities firm. — Photo bnews.vn

The stock market last week closed its most positive week since the Middle East conflict erupted.

On the Hochiminh Stock Exchange (HoSE), the VN‑Index rose 47.38 points from the previous week to 1,871.91 points, marking a second straight week of gains after a period of sharp adjustment. 

During the week, the index at times moved close to the 1,900-point psychological level before profit-taking pressure pushed it back toward the 1,850 area, after which it recovered again.

The VN30 basket also recorded a firmer gain of 2.29 per cent, moving above the 2,000-point threshold and acting as the main force behind the broader market.

Vietnam Construction Securities said that global oil prices have cooled, moving away from the US$100 per barrel area. This helped reduce concerns over global inflation risks, improving investor sentiment and supporting the domestic market's rebound.

Despite the index's positive performance, strong divergences were seen among sectors. 

The VN‑Index's rise still relied heavily on a limited group of large-cap stocks, particularly shares in the Vingroup ecosystem.

Moreover, liquidity stayed low as the weekly average trading value was about 32 per cent lower than the level of the nearest 20-week average, suggesting that big money has not truly re-entered the market.

On June 26, HoSE recorded about 533 million shares traded, equivalent to more than VNĐ16.1 trillion. Total trading value across the three exchanges was around VNĐ17 trillion, significantly lower than in more active periods.

Foreign investors continued to be net sellers on the market, but the value of selling was only about VNĐ213 billion, down more than 92 per cent compared with the prior week.

According to Nguyễn Tấn Phong, an analysis expert at Pinetree Securities, the reason was the ongoing strength of the US dollar, following cautious signals from the US Federal Reserve on its year-end interest-rate path. 

The USD/VNĐ rate was around 26,454, up about VNĐ97 per USD versus the end of the first quarter, which can weigh on capital flows to emerging markets.

This week, the market is expected to move into a sensitive period as investors wait for additional domestic and global economic information, including negotiations between the US and Iran, shipping activity via the Hormuz Strait, US June jobs data, manufacturing PMI and the ECB Central Banking Forum in Sintra.

Domestically, investors will likely focus on GDP, PMI, CPI and the second-quarter production and trade picture.

Phong said a higher-probability scenario is that the VN‑Index continues a 'green on the outside, red in the core' pattern, moving roughly within the 1,850–1,890 range as a few pillar stocks keep the index steady while the broader market lacks clear momentum.

Pinetree Securities also pointed out that liquidity remains below the average level, which it interprets as a sign that large money has not fully joined the market. 

Under that backdrop, domestic capital is likely to stay focused on a buy-and-accumulate approach during market pullbacks, rather than chasing when the market rallies strongly.

Meanwhile, Bùi Văn Huy, deputy director of FIDT Asset Consulting & Management Company, said the market has not fallen into a clearly negative state, but it still requires additional time to accumulate. 

He added that the most important signal is not just index performance but whether liquidity improves.

"If liquidity has not returned, the sideways trend in the 1,850–1,900 zone is likely to continue dominating the market," Huy said.

For the short term, investors are advised to keep an appropriate stock allocation, limit chasing purchases during strong up-moves, and prioritise companies with solid fundamentals and distinct growth narratives, such as banks, securities, retail, public investment and sectors that benefit from market-upgrading trends.

With the VN‑Index moving close to the 1,900-point area, the report concluded that the market will need broader sector consensus and the return of large capital flows to establish a steadier upward move in the coming period. 

Bizhub