Vietnamese shares narrowed down a sharp decline on Tuesday as investment switched to mid-cap and small-cap stocks while large-cap firms were seen to move downward due to rising profit-taking pressure.

The benchmark VN Index on the HCM Stock Exchange fell 0.28 per cent to close at 934.08 points after falling as much as 1.11 per cent during the day.

The southern market index gained 0.36 per cent on Monday.

A similar pattern could be seen on the Ha Noi Stock Exchange as the HNX Index ended Tuesday down 0.71 per cent at 105.55 points, narrowing its intraday declining band of 1.81 per cent recorded earlier in the session.

The northern market index lost total 1.92 per cent in the last two sessions.

More than 263.5 million shares were traded on the two local exchanges, worth VND5.23 trillion (US$232.5 million).

Foreign investors finished Tuesday as net sellers, posting VND351.8 billion in net sell value. They net-bought VND88 billion on Monday to end the previous seven straight days of net selling with a total VND927.5 billion.

The market trading breadth was negative with 199 gaining stocks against 332 declining ones and 95 stocks ending flat.

According to Sai Gon-Ha Noi Securities JSC (SHS), large-cap stocks were to blame for the market’s decline on Tuesday as they were hit by short-term profit-taking pressures.

Blue chips that pulled the stock market down included high-end property developer Vinhomes (VHM), steel producer Hoa Phat (HPG), VPBank (VPB), budget carrier Vietjet (VJC) and Techcombank (TCB) – whose losses ranged from 0.8 per cent to 4.2 per cent.

The market conditions on Tuesday for both VN Index and HNX Index showed that the stock market was undergoing a strong uncertainty, SHS said in its daily report.

“Cash continued flowing into and lift the market when the indices went down deeply, but net foreign selling somehow affected investors’ confidence badly,” SHS said.

While profit-taking pressure rose onto large-cap stocks, mid-cap and small-cap ones became “safe haven” for investors.

According to vietstock.vn, some mid-cap and small-cap stocks that drew attention of investors included Vietinbank Securities (CTS), property developer FLC Group (FLC), Hoang Anh Gia Lai (HAG) and its agriculture arm HAGL Agrico (HNG).

“There will be more opportunities for investors with mid-cap and small-cap stocks at the moment but it showed investors are now more speculative and unwilling to make long-term and mid-term purchases,” vietstock.vn wrote in a report.

The change of cashflow would make it harder for the stock market to recover as there would be more intraday fluctuations and the decline of blue-chip liquidity would signal more market risks, it said.

SHS forecast the VN Index would move sideways on Wednesday between 920 and 950 points and listed firms with forecast of higher-than-expected second-quarter earnings reports should be targeted. — VNS