Market waits for Q2 earnings as capital stays on the sidelines

Market waits for Q2 earnings as capital stays on the sidelines

Large-lot capital continued to stand aside, and the market waited for fresh triggers from Q2 business results and global monetary policy signals.

Investors conduct transactions at a securities firm trading office. — Photo vfs.com.vn

The domestic stock market saw sideways-to-choppy price action last week, with the VN‑Index unable to form a clear trend and trading liquidity remaining subdued.

Finishing the first week of the third quarter, the VN‑Index on the Hochiminh Stock Exchange (HoSE) lost 0.53 per cent to 1,862.08 points, staying below the historical peak zone of 1,900–1,930 points.

Liquidity remained at low levels. The average trading value on HoSE was over VNĐ17.4 trillion (US$663 million) per session, down more than 9 per cent from the previous week.

Foreign investors were also the week's notable negative factor, net selling roughly VNĐ3 trillion on the market over the week. 

Over five trading sessions, foreigners were net buyers only once, on July 1, with a value of nearly VNĐ132 billion.

According to Nguyễn Tấn Phong, a Pinetree Securities analyst, last week's action again reflected a 'green on the outside, red in the core' pattern, headline strength driven by a narrow set of names rather than broad participation.

The index's support has continued to rotate between the Vingroup-linked group and banks. At one point, when Vingroup (VIC) and Vinhomes (VHM) corrected, the VN‑Index fell nearly 17 points. But immediately afterward, the banking group became the replacement force pulling the index up, he said.

International developments brought more positives. Negotiations between the US and Iran continued, helping oil prices fall by nearly 8 per cent from their peak, while US stocks set new highs. 

Still, global capital continues to favour the US dollar amid cautious signals from the US Federal Reserve (Fed), which can weigh on emerging markets, including Việt Nam.

Saigon-Hanoi Securities (SHS) said that the market still sits in an accumulation phase, awaiting more important fundamental information, especially the second-quarter business performance, which could prompt a fresh repricing of stock groups.

This week, attention is expected to remain on global monetary policy and geopolitical developments.

The report cited that the recently released US June jobs report came in unexpectedly soft, with the economy adding only 57,000 jobs, far below forecasts. 

It said this helps ease concerns about the Fed continuing to raise rates soon, even as inflation risks remain present. With oil prices retreating as well, expectations around inflation could cool further.

Market monitoring for this week will include the Fed's June meeting minutes and additional signals about the interest rate direction in the second half of the year. 

In Europe, the ECB will publish minutes of its monetary policy meeting, while Germany, France and Italy are expected to release industrial production and trade data. Other focal points include PMI services, the US trade balance, China inflation and an OPEC-related agenda item.

At home, after news that Q2 GDP grew 8.39 per cent and the first-half GDP rose 8.18 per cent, the strongest level in around two decades, investor attention is moving to the forthcoming Q2 earnings season of listed companies. This is the most important market catalyst in July.

According to Phong, the baseline scenario remains that the VN‑Index continues to fluctuate sharply in the 1,840–1,890 zone. Liquidity staying below the 20-week average suggests large inflows have not yet truly returned, allowing only local index support rather than a broadly led rally. 

He also pointed out that foreign sellers have not shown signs of stopping, given the strength of the US dollar.

Similarly, VIX Securities said that the VN‑Index is facing strong resistance around 1,900 points, so investors are advised to stay prudent over the next 2–3 weeks while being prepared for potential pullback waves if selling pressure increases. 

Nevertheless, such pullbacks could also create accumulation opportunities for stocks of companies with solid fundamentals and attractive valuations for long-term investors. 

Bizhub