As worries grow about additional US rate hikes, investors may now turn to the earnings season in which they hope to find something extraordinary to drive overall sentiment up.

On Friday, some Fed officials revealed the bank’s plan to raise interest rates two or three more times by June 2019 so lending costs would touch the neutral territory, allowing the Fed to stay out of the way the economy runs.

That, in the short run, would calm investors as they are now aware of the Fed’s plan, but in the long run it may result in an outflow of foreign capital from emerging markets, including Viet Nam.

Worries over the US central bank’s rate hike scenario were among the key factors that dampened local market sentiment last week.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HOSE) was down 0.53 per cent on Friday to finish last week at 958.36 points, totalling a weekly loss of 1.2 per cent.

The minor HNX Index on the Ha Noi Stock Exchange rose 0.17 per cent on the same day to end the week at 108.10 points, marking a weekly decline of 1.51 per cent.

An average of more than 187.4 million shares were traded in each of the five sessions last week, worth VND4.1 trillion (US$181.6 million).

Foreign investors posted VND270.8 billion in net sales. Last week’s figure was down 48 per cent from the previous week’s VND500 billion.

Investors are now likely to shift focus to corporate earnings reports for the third quarter for some news powerful enough to boost market morale.

"Third-quarter and three-quarters earnings results and forecasts from listed companies will support the market," Bao Viet Securities JSC (BVSC) said in its weekly wrapup note.

The centre of attention will be listed companies that often produce good earnings reports, have high quality of corporate governance and do well in information disclosure.

The largest listed firms by market value are expected to release higher-than-expected earnings reports and have good impacts on market sentiment.

Some listed firms that have already announced impressive nine-month earnings are Military Bank (MBBank), PetroVietnam Gas Corporation (PV Gas), Saigon Securities Inc (SSI) and Phu Nhuan Jewellery JSC (PNJ).

The first three companies posted more than 50 per cent yearly increases in their post-tax profit in the first three quarters of 2018, while PNJ showed its nine-month post-tax profit gained 38 per cent year-on-year.

MBBank recorded VND4.8 trillion in nine-month post-tax profit. The figures for PV Gas, SSI and PNJ were VND9 trillion, VND1.16 trillion and VND694.4 billion.

Other large-cap listed companies such as Vietcombank, dairy producer Vinamilk, food and beverage firm Masan, and property developer Vingroup have yet to release third-quarter and nine-month earnings data.

"However, corporate earnings are often differentiated among and within sectors, so earnings should not be a factor to count on at the moment for strong market growth," Sai Gon-Ha Noi Securities JSC (SHS) said in a note.

"Technically, the market is trading in a neutral range so there is little chance for a sharp decline or a strong increase in the coming week," SHS said.

"The benchmark VN-Index may experience volatility and test the wide range of between 930 and 990 points," SHS added.

Some factors that may damage market sentiment include the slowdown of the Chinese economy and trade tensions between China and the US. – VNS