Market faces further correction risk as brokers urge caution

Market faces further correction risk as brokers urge caution

With the VN-Index having lost the 1,800-point level, the 1,780-1,790-point range is being closely watched as a near-term support area.

Investors watching stock movements on a computer screen at a Bao Viet Securities office. — VNA/VNS Photo

The stock market could remain under correction pressure after losing more than 57 points last week and falling below the 1,800-point threshold, with securities companies advising investors to remain patient until the market establishes a clearer equilibrium.

The benchmark VN-Index, representing the Hochiminh Stock Exchange (HoSE), ended the week down 3.12 per cent at 1,795.21 points, while the HNX-Index on the Hanoi Stock Exchange (HNX) declined by 3.49 per cent to 272.68 points.

Liquidity on the HoSE weakened significantly. Total trading value for the week reached VNĐ76.57 trillion (US$3 billion), averaging more than VNĐ15.31 trillion per session, compared with VNĐ18.67 trillion per session in the previous week.

Selling in major capital flows added to the pressure. Foreign investors recorded net selling of VNĐ1.64 trillion on HoSE and VNĐ22 billion on the HNX.

Investor sentiment was also affected by international developments, as Brent crude prices surged by nearly 13 per cent to approach $110 per barrel amid tensions in the Middle East, raising concerns over inflation and elevated interest rates.

The market volatility came shortly before September 21, when Vietnamese stocks are scheduled to be officially allocated to FTSE Russell's global indices as part of the country's reclassification to Secondary Emerging Market status.

With the VN-Index having lost the 1,800-point level, the 1,780-1,790-point range is being closely watched as a near-term support area. Bottom-fishing demand, movements in large-cap stocks and foreign trading are among the factors being monitored in the coming week.

Bao Viet Securities Company (BVSC) said a sudden increase in active selling had pushed the benchmark through important support levels, indicating elevated short-term correction risk.

According to BVSC, capital was showing signs of decisively leaving the market, while sellers remained dominant.

The securities firm recommended bringing portfolio exposure back to safer levels and maintaining risk-management discipline for positions that breach stop-loss thresholds.

Investors should not rush to bottom-fish during steep declines, BVSC said, but should wait for the market to establish a more solid equilibrium accompanied by an exhaustion of selling pressure.

Meanwhile, BIDV Securities Company (BSC) said profit-taking pressure following the strong recovery over the previous few weeks could continue in the short term, potentially taking the VN-Index towards the 1,765-point area.

Viet Capital Securities (VCSC) also expected the benchmark to retreat further towards the 1,780-1,790-point support zone. Any recovery, if it occurs, could be capped around 1,810 points, according to the firm.

Thien Viet Securities (TVS) noted that the VN-Index was approaching its 200-day moving average, or MA200, which currently corresponds to around 1,788-1,790 points.

However, TVS said continued correction pressure among major large-cap groups, including Vingroup-related and banking stocks, could push the benchmark further towards the 1,770-1,780-point range.

Vietcombank Securities (VCBS) similarly said there had yet to be a signal that the downward trend was reversing, as bottom-fishing demand remained weak.

According to VCBS, alternating gains and declines could continue during the market's correction process, with the 1,780-1,790-point range serving as the nearest support zone.

The company therefore identified several potential technical levels below the VN-Index's latest close, ranging from the 1,780-1,790-point area cited by VCSC and VCBS to BSC's projection of around 1,765 points, while TVS highlighted the MA200 as an immediate level to watch. 

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