Market expected to stay quiet ahead of Tết

Monday, Feb 05, 2024 07:08

A trader talks to investors at a trading floor of VCBS. — Photo courtesy of the securities firm

The Vietnamese stock market was choppy last week with slight correction pressure. Trading volume is likely to be thin this week as investors decline to make big bets ahead of Tết (Lunar New Year holidays).

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,172.55 points, and the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 230.56 points.

For the week, the former fell 0.2 per cent while the latter rose nearly 0.5 per cent.

The liquidity on HoSE reached nearly VNĐ86.5 trillion (US$3.55 billion) during the week, an increase of 17.7 per cent from the previous week. Similarly, liquidity on the HNX-Index also surged by 21.8 per cent.

The gains in liquidity were seen in most sectors, including real estate, securities, banking, construction, retail, information technology, logistics and maintenance, and industrial real estate, according to FiinTrade.

Last week, foreign investors net sold over VNĐ1.3 trillion on the market.

Nguyễn Khắc Thành, an analyst at the Saigon - Hanoi Securities JSC (SHS), said that the highlight of the week was a session of corrective pressure with a significant liquidity of over VNĐ1 billion. However, afterwards, the VN-Index made a recovery and returned to the 1,160 point-level, with several stocks surpassing their recent peaks.

"The market performance reflects a high level of divergence, while short-term capital flow maintains positive rotation signals with active trading within each stock group,” Thành said.

“During the week, many stocks continued to show outstanding price increases during the announcement of fourth-quarter business results.”

Technically, Thành noted that the VN-Index experienced a significant correction around the resistance zone near 1,185 points. This zone corresponds to the resistance of the long-term downtrend line, which dates back to April 2022 from the 1,500-point level.

The market showed hesitant movements, almost trading sideways after a recovery session.

Thành added: "In the short term, the VN-Index continues its upward trend, but the retest of the support level from the small consolidation phase is not yet complete.

"In the medium term, the index is moving within a balanced range, forming a new accumulation base. The market anticipates the formation of a consolidation range between 1,150 and 1,250 points."

Based on fundamental analysis, Thành observed that the domestic macro-economic conditions remain stable and there is a gradual increase in quarterly GDP growth.

However, the GDP growth rate has not met expectations, and credit growth remains relatively weak. This suggests a limited capacity for capital absorption in the economy, with difficulties in the real estate market and especially in the bond market, which has not yet undergone significant transformations.

Meanwhile, the global economic situation is currently unpredictable, characterised by instability and low growth, with many economies in the European Union experiencing a downturn.

Nevertheless, Thành pointed out the positive aspect that the inflation situation has stabilised and the US Federal Reserve has decided a pause in interest rate hikes, while also hinting at the possibility of initiating a rate cut cycle in 2024.

A report from Vietcombank Securities Company (VCBS) also highlighted the unfavourable external factors, as there have been warnings about the possibility of the largest economy in Europe, Germany, falling into a permacrisis.

This week, the market will have three trading sessions before entering a week-long holiday of Tết. At a time like this, investors’ risk appetite tends to stay at a low level. — VNS

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