VN-Index falls below 1,700 as large-caps weigh on market, steel stocks rally

VN-Index falls below 1,700 as large-caps weigh on market, steel stocks rally

Weak liquidity and persistent selling pressure kept investors cautious despite gains in market breadth.

The VN-Index's retreat below 1,700 points has raised concerns over its near-term direction, with technical indicators pointing to continued downward momentum. — Photo tuoitre.vn

Việt Nam’s benchmark VN-Index fell more than 11 points on Tuesday, slipping below the psychologically important 1,700-point level as heavy losses in large-cap stocks offset gains in steel and other material shares.

On the main bourse Hochiminh Stock Exchange (HOSE), the VN-Index lost 0.65 per cent to end the session at 1,699.62 points.

Meanwhile, the Hanoi Stock Exchange (HNX) index rose by 0.35 per cent to close at 251.42 points, highlighting the divergence between the two exchanges.

The market struggled to sustain an early afternoon recovery, with selling pressure returning in the latter part of the session. Liquidity remained weak, with total trading value reaching VNĐ13.8 trillion (US$535.6 million).

Trading value on the HOSE fell by 30 per cent from the previous session, while that on the HNX dropped 45 per cent.

Market breadth was relatively positive, with 340 stocks advancing against 300 decliners. However, gains among smaller stocks were insufficient to offset losses in heavyweight shares.

Vingroup (VIC) fell by 3.3 per cent, dragging the VN-Index down by more than 12 points. Other major decliners included Vinhomes (VHM), Novaland (NVL), Gemadept (GMD) and Gelex (GEX), adding to pressure from the real estate and industrial sectors.

By contrast, steel stocks posted strong gains. Hoa Phat Group (HPG), Nam Kim Steel (NKG) and Hoa Sen Group (HSG) rose by between 3 and 4 per cent, while HPG alone contributed around 1.5 points to the benchmark.

However, the market's recovery remained narrow. The 10 biggest contributors to the VN-Index's gains added only around five points, underscoring the dominance of selling pressure from large-cap stocks.

The VN-Index's retreat below 1,700 points has raised concerns over its near-term direction, with technical indicators pointing to continued downward momentum. — Photo tuoitre.vn

Foreign investors continued to be net sellers, with net selling value approaching VNĐ500 billion. Military Bank (MBB) and Vietcombank (VCB) were the largest targets of foreign selling, with net outflows of VNĐ255 billion and VNĐ220 billion, respectively.

HPG and Saigon-Hanoi Bank (SHB), meanwhile, attracted strong foreign buying.

Market outlook

The VN-Index's retreat below 1,700 points has raised concerns over its near-term direction, with technical indicators pointing to continued downward momentum.

According to analysts at Yuanta Vietnam Securities, the underlying market conditions remain weak, while the index's close near 1,700 points has yet to provide a reliable stabilisation signal.

Yuanta said the VN-Index could fall towards 1,680 points this week if large-cap stocks continued to decline.

The brokerage advised investors against widespread bargain-hunting before clearer signs of a market bottom emerged. It recommended reducing equity exposure to 30 per cent of portfolios and holding 70 per cent in cash.

Meanwhile, BIDV Securities (BSC) said selling pressure could continue to weigh on the market in coming sessions, despite signs of bargain-hunting towards the close. The brokerage said the VN-Index could face further declines as investors remained cautious following the sharp sell-off.

“A break below the 1,678-1,690-point range could expose the market to further declines towards 1,650-1,660 points, around the July low,” they wrote. 

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