Investors brace for volatile week after VN-Index rebound

Investors brace for volatile week after VN-Index rebound

Attention is now shifting to the first trading week of August, when a series of domestic and international events could influence market sentiment.

Traders working at Viet First Securities. — Photo courtesy of the firm

The domestic stock market returned to positive territory last week, snapping a four-week losing streak as stronger than expected second-quarter corporate earnings and stable monetary policies from major central banks helped improve investor sentiment. 

However, trading liquidity remained subdued, while persistent foreign selling and global uncertainties continued to weigh on the market outlook.

On the Hochiminh Stock Exchange (HoSE), the VN-Index closed last week at 1,735.78 points, up 2.95 per cent from the previous week, marking its first weekly gain after four consecutive weeks of declines.

Despite the rebound, trading activity showed signs of caution. Average daily trading volume on the southern bourse reached around 726 million shares, down more than 10 per cent from the previous week. 

Average daily trading value also declined by nearly 13 per cent to approximately VNĐ17.5 trillion (US$665.4 million), while matched trading volume was 6.4 per cent below the 20-week average.

Foreign investors remained net sellers, extending their selling streak with net outflows of more than VNĐ2.5 trillion during the week. The value was more than 30 per cent lower than the previous week's figure.

Statistics compiled by Viet First Securities showed that foreign ownership across the Vietnamese stock market fell from 13.74 per cent to 13.3 per cent between the beginning of the year and July due to sustained net selling. 

However, the company noted that international investors had simultaneously demonstrated highly selective accumulation in large-cap companies with solid business fundamentals.

Attention is now shifting to the first trading week of August, when a series of domestic and international events could influence market sentiment.

Global investors will now focus on the US July employment report, the ISM manufacturing and services PMIs, together with other production and trade indicators that could shape expectations for the Fed's next policy decision.

Elsewhere, OPEC+ is scheduled to meet to discuss oil production quotas, while developments in the US-Iran conflict remain a key variable influencing energy prices and inflation expectations.

The US earnings season will also continue with results from major companies including AMD, Berkshire Hathaway, Disney and Uber.

Domestically, Việt Nam's second-quarter earnings season has passed its busiest phase, providing a clearer picture of listed companies' profitability and encouraging more selective capital flows across sectors.

According to analysts at CSI, last week's recovery lacked convincing trading volume, with matched transactions remaining below both the previous week's session and the 20-week average.

After taking partial profits around the 1,760-point level, investors should wait for the VN-Index to retest the 1,710-1,720-point support zone before considering increasing equity exposure while maintaining 20-30 per cent of portfolios in cash to manage risks, the securities firm said.

Based on technical analysis, SSI Research said the VN-Index remains in a technical recovery phase. 

The benchmark is currently facing strong resistance in the 1,750-1,770-point range, although momentum indicators have yet to show significant signs of weakening. The 1,700-1,720-point area continues to serve as the nearest support level.

Meanwhile, Pinetree Securities expects the market to continue advancing, albeit cautiously, with the VN-Index likely to fluctuate within the 1,720-1,780-point range amid intermittent bouts of volatility. 

The securities firm said the scenario is supported by the fact that second-quarter earnings results are now largely available, allowing investors to value companies based on actual financial performance rather than expectations. 

Bizhub