A worker operates a steel pipe production line at a factory of Hoa Phat Group. Hoa Phat Group (HPG) was one of the three strongest supporters of the VN-Index last week. — VNA/VNS Photo Duc Dung
The stock market will experience choppy trading this week with strong correction, analysts said.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) rose 0.69 per cent to close Friday at 990.00 points.
It had gained 2.45 per cent last week.
An average of 480 million shares were traded on the southern exchange during each session last week, worth VND9.7 trillion (US$418 million).
According to SSI Securities Joint Stock Company (SSI), although the market recorded positive movements in terms of scores last week, the risks are increasing as the VN-Index has approached the psychological resistance zone of 990-1,000 points.
“Selling force is likely to appear from this resistance area, causing the VN-Index to correct deeply,” SSI said.
“The VN-Index is forecast to head toward resistance zone 990-1000 points next week,” said Tran Xuan Bach, a stock analyst at Bao Viet Securities Co.
“This is a strong psychological resistance zone, therefore, we believe that the index may face correction and volatility pressure,” he said.
“The market will experience a fluctuation and wide divergence among stock sectors. The capital may flow into stock sectors that have yet to increase for profit,” he added.
“Overall, the market’s current movement is considered positive in the short term with strong domestic cash flow participation and foreign investors’ net injection. Therefore, market corrections are considered necessary accumulation for the index before continually achieving new highs,” he said.
The analyst group from MB Securities Joint Stock Company (MBS) has a very positive view on market movements this week.
MBS said that the market's strong support from blue-chips showed the VN-Index was very likely to reach the 1,000-point resistance.
The liquidity in the last four trading sessions was also positive compared to the sideways period from June onwards, they said.
The large-cap stocks that have accumulated a long time ago were rebounding strongly, boosting indices up in the near future, they said.
Vietcombank (VCB), PetroVietnam Gas JSC (GAS) and Hoa Phat Group (HPG) were the three strongest supporters of the VN-Index last week.
Vingroup (VIC), Masan Group (MSN) and Becamex (BCM) were the three poorest performers.
Steel stocks gained well with Hoa Sen Group (HSG) up 1.8 per cent, Ha Tien 1 Cement Joint Stock Company (HT1) rising 2.1 per cent, Hoa Phat Group (HPG) increasing 11.1 per cent, Nam Kim Group (NKG) gaining 16.8 per cent, Vietnam-Italy Steel JSC (VIS) up 20.6 per cent and Pomina (POM) rising 24.6 per cent.
Plastic and chemical production also increased positively with Tien Phong Plastic Joint Stock Company (NTP) up 3.68 per cent, An Tien Industry JSC (HII), up 4.87 per cent, Phuoc Hoa Rubber Joint Stock Company (PHR), gaining 5.21 per cent, Binh Minh Plastics Joint Stock Company (BMP), up 8.59 per cent and An Phat Bioplastics., JSC (AAA), going up 9.33 per cent.
“Stock exposure should be maintained at 50-60 per cent of the portfolio,” said Tran Xuan Bach, a stock analyst at Bao Viet Securities Co.
“Investors holding large cash proportion may consider reopening short-term positions at market’s corrections.
“Investors with high stock exposure may consider lowering this ratio at resistance zone 990-1000 points," he said.—VNS