Rolled steel produced by Hoa Sen Group (HoSE: HSG). The company's shares gained total 17.9 per cent last week. — Photo vsa.com.vn

While corporate earnings reporting no longer has an impact on overall market sentiment, all eyes will be on new developments of the second wave of coronavirus in Viet Nam.

Viet Nam’s benchmark VN-Index on the Ho Chi Minh Stock Exchange gained a total of nearly 5.4 per cent to finish last week at 841.46 points.

The market’s growth was a surprise as most analysts had bet on a change of market sentiment from positive to negative since the number of infections was increasing.

As of Sunday evening, the total number of infection cases in Viet Nam was 841 and 11 people had died.

The market recovered from two slumps on July 24 and 27, which pushed the VN-Index down to 785 points, as investors were motivated by the efforts of the Government to put the virus under control soon, Vu Minh Duc, director of market research and analysis at VietCapital Securities Corp, said.

Since July 27, the VN-Index has gained a total of 7.17 per cent in two weeks.

Last week’s rally was attributed to strong gains in the materials sector, which added 8.5 per cent to its market capitalisation. The industry was led by steel producers such as Hoa Phat (HPG), Hoa Sen (HSG) and Nam Kim Steel (NKG).

Following the materials industry was consumer staples, which was up 7.7 per cent on the back of dairy producer Vinamilk (VNM), Masan (MSN) and brewer Sabeco (SAB).

The recovery of global crude had a positive impact on the oil and gas sector with PetroVietnam Oil Corp (PVO), Petrolimex (PLX), PetroVietnam Technical Services (PVS) and PetroVietnam Coating Corp (PVB) rising.

The banking, industrials, utilities, information and technology, financials, and health care and pharmaceuticals sectors also advanced between 2.4 per cent and 6.2 per cent.

BIDV Securities Corp (BSC) said in its weekly report that the market will struggle in August as there will be a lack of good news strong enough to lift the whole market as the spread of virus remains unpredictable and there is tension between the US and China.

Corporate earnings reports are no longer a factor that could drive market sentiment, the company added.

More than 690 listed companies on HoSE and HNX, equal to 92 per cent of the total, have posted an annual decline of 11.8 per cent in their post-tax profit in the second quarter. After six months, those companies saw net profits fall 16.8 per cent on-year.

In the last two trading days of last week, market growth weakened to indicate investors were a bit confused, BSC said.

Last week’s development may suggest the VN-Index will struggle at 850-865 points, VPS Securities’ director of market analysis Le Duc Khanh told tinnhanhchungkhoan.vn.

“The VN-Index may slip from 840-845 points before bouncing back to 850-855 points or it could leap to 845-850 points then decline,” he forecast. “Whatever the move is, the market is getting more positive than negative.”

“The increase of new cases in Viet Nam will definitely affect Viet Nam’s socio-economic development path, especially when local companies have experienced the toughest second quarter,” Nguyen Anh Khoa, Agribank Securities Co’s director of market analysis and consultancy, said.

“The level of 850 points will still be strong resistance for the VN-Index and it is not easy to get past this level,” he said. — VNS