VN-Index likely to continue fluctuating

Monday, May 29, 2023 06:58

A woman passing an electric board showing the market's movements. — Photo

The stock market is still consolidating above the support level of 1,060 points. If the level is held and liquidity remains positive, the benchmark VN-Index is likely to head towards 1,080 points, said experts.

Last week, the market fluctuated despite news of another rate cut by the central bank.

The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) finished the week at 1,063.76 points, while the northern benchmark HNX-Index was at 217.64 points.

For the week, the former slightly fell 0.3 per cent but the latter increased by 1.74 per cent.

Foreign investors net sold more than VND2.2 trillion (US$93.7 million).

Tien Phong Securities Corporation (TPS) said that the VN-Index marked a weekly loss after gaining for two straight weeks. However, the benchmark stayed above 1,060 points, meaning that the retesting of the downtrend starting from January has been successful and the market has a chance to move towards the target level of 1,080 points.

“The market is currently still consolidating above the support level of 1,060 points. If this level is held and liquidity stays in the positive as it does now, the index is likely to head towards 1,080 points,” said TPS.

Meanwhile, Saigon - Hanoi Stock Exchange (SHS) said that after a good performance week and creating a short-term bullish wave, the market entered a correction zone with two consecutive weeks of almost going sideways.

The VN-Index continued to form a tight small accumulation foundation.

With the current state, SHS said that the VN-Index has almost completed the cumulative correction foundation and is ready to continue the next uptrend.

If it surpasses the near resistance area of around 1,075 points, the index can expect to move towards the resistance area of 1,100 points and then around 1,150 points, and create a premise for a medium-term bull market.

On the other hand, if the market fails to form a medium-term uptrend, which is beyond the 1,150-point area, SHS believes that the support level of the VN-Index will be around the area of 1,000 - 1,050 points.

“With a tight accumulation base over the past six months, the market has created a good enough accumulation base to form a medium-term wave. In our view, at the moment, the market is moving from a cautious to a more positive state," said SHS.

From a technical perspective, Vietcombank Securities Company (VCBS) said that the benchmark index ended the week with a red candle, trading around the reference level due to pressure of selling force that was mainly in large-cap stocks.

However, the market is still actively accumulating around the 1,060 - 1,070 point area along with the divergences among stock groups.

With a positive scenario, VCBS forecasts that the VN-Index will continue to fluctuate in the next 1-3 sessions. The securities firm recommended that investors continue to hold onto the market, and may consider disbursing from 20 to 30 per cent for stocks that are tending to accumulate and successfully test the resistance area.

VCBS also said that after the reduction in operating interest rates on May 23, the State Bank of Vietnam (SBV) had a meeting with senior leaders of 26 commercial banks.

Accordingly, commercial banks agreed from May 29 to reduce lending interest rates by 0.5 percentage points for existing outstanding loans to provide financial support to customers amid production and business activities showing signs of slowdown.

“This continues to be a positive signal showing the consistent policy of SBV in reducing borrowing costs of the economy, supporting businesses and people to access capital at low interest rates,” VCBS said. — VNS

Comments (0)