Vietnamese shares were boosted to a new 10-year-high by large-cap stocks last week, but the latest drop may signal further decline in the coming week, analysts say.

The benchmark VN Index on the HCM Stock Exchange fell 0.24 per cent to close Friday at 890.69 points after having a 10-day rally of 7.1 per cent.

The southern market index advanced 2.6 per cent on a weekly basis and 6.4 per cent since the start of November.

The HNX Index on the Ha Noi Stock Exchange struggled to finish last week at 108.31 points, extending its gain for an eighth session with total growth of 3.3 per cent. It marked a total weekly growth of 1.8 per cent.

More than 221.8 million shares were traded in each session last week, worth VND5.04 trillion (US$224.2 million).

Last week’s average trading figures show a decline of nearly a quarter in volume and 44 per cent in value compared to the previous trading week.

Foreign investment remained strong as investors finished last week as net buyers, posting a net buy value of VND432 billion during the week.

Last week’s increases in both local market indices were attributed to the sharp rise of large-cap stocks.

The indices were driven up by positive investor optimism on the Government’s plans to withdraw State capital from a number of State-run companies.

Those include Binh Minh Plastic (BMP), dairy producer Vinamilk (VNM), Tien Phong Plastic (NTP), Ha Do Group JSC (HDG), IT group FPT Corp (FPT) and Domesco Medical Import-Export JSC (DMC).

Those stocks have advanced total 3.8 per cent, 5.4 per cent, 10 per cent, 11.3 per cent, 8.6 per cent and 19 per cent, respectively.

Lead analyst Nguyen Hong Khanh of Sacombank Securities Company (SBSC) said the growth of these stocks have proved stocks with supportive information are becoming more attractive to investors at the moment and will clearly have better prospects in the near future.

However, the fall of the VN Index on Friday and the struggle of the HNX Index to maintain growth indicated the stock market would be challenged by increasing profit-taking in the coming weeks.

Accdording to the Bao Viet Securities Company (BVSC), Friday’s session marked the first correction for the VN Index after 10 consecutive days of rising as the large-cap stocks were hit by profit-taking, pulling both mid-cap and small-cap shares down.

The market would likely enter a short-term declining stage to lift off the heavy selling pressure that has put heavy pressure on the market, BVSC said in a note, adding that there were no signs of a market slump at the moment, with the money moving between stocks and sectors.

Sharing a similar market outlook, Vietcombank Securities Company (VCBS) said that the current strong profit-taking pressure would prevent large-cap stocks from advancing further and investors may shift their focus to other stocks.

The shift of investment would raise the values of the companies that are leading in their industries, after their shares returned to attractive price ranges in October, VCBS added.

Analyst Khanh at SBSC told tinnhanhchungkhoan.vn late last week that a lot of shares have mostly moved sideways so far this year.

Investors should re-direct their investment to the sectors that are expected to put in good fourth-quarter performances like real estate, construction and securities, Khanh said. – VNS