HÀ NỘI — The Vietnamese stock market faced a week of fluctuations, with the VN-Index undergoing mild corrections after three consecutive weeks of gains.

Short-term profit-taking pressures have emerged, yet experts remain optimistic about the market's long-term outlook, citing steady economic growth and attractive valuations. 

The VN-Index ended the week at 1,262.57 points, marking a 0.6 per cent decline, while the HNX-Index dropped by 0.84 per cent to close at 227 points.

The ongoing net selling by foreign investors, coupled with a lack of supportive information and weakening performance from leading stocks, weighed on market sentiment.

Foreign investors recorded net sales exceeding VNĐ1.13 trillion (US$44.47 million) across both exchanges during the week, with VNĐ1.18 trillion net sold on the HoSE and nearly VNĐ48 billion net bought on the HNX. 

In its newly released report 'December 2024 Investment Compass', VNDirect Research predicts the VN-Index will close 2024 within the range of 1,250 to 1,270 points.

The firm expects the US Federal Reserve to continue cutting interest rates during its upcoming December meeting, potentially cooling the US Dollar Index (DXY) and easing pressure on the Vietnamese đồng.

This, in turn, could allow the State Bank of Vietnam to focus on improving liquidity and credit growth, positively influencing market liquidity and investor sentiment. 

Although economic growth and corporate earnings have shown improvements, these positive factors have yet to be fully reflected in market valuations. This is due to record-high foreign investor net sales, persistent currency pressures, and tighter liquidity conditions compared to the same period in 2023. 

"Given current valuations and the macroeconomic landscape, this is an opportune time for long-term investors to allocate capital and accumulate stocks to build portfolios for 2025," VNDirect Research advises.

However, it also cautions that the market has not yet established a firm upward trend, and excessive use of financial leverage could backfire, increasing risks. Investors are encouraged to adopt cautious capital allocation strategies. 

Phan Tấn Nhật, Head of Analysis at Saigon-Hanoi Securities (SHS), described the current adjustment and consolidation as relatively normal following three weeks of recovery.

Despite the decline, the VN-Index remains above the 200-day moving average and 2023’s peak levels of around 1,260 points, indicating solid support in this range. Nevertheless, the 12.2 per cent drop in HoSE trading volume reflects a cautious sentiment among investors. 

While short-term pressures persist, the market has notable strengths. Nhật highlighted the improved internal quality of the market after a prolonged consolidation phase since early 2024. Many stocks were now trading at reasonable prices, presenting opportunities for investors.

With a total market capitalisation of approximately $296 billion, the Vietnamese market remained attractive relative to its economic scale, especially with GDP growth projections for 2025 ranging between 6.5 and 7 per cent. 

In the short term, Nhật forecast that the VN-Index would continue fluctuating around the support level of 1,260 points and the strong resistance zone of 1,280-1,300 points.

Overcoming this resistance would require robust catalysts from fundamental factors and strong growth prospects. For the medium term, the VN-Index was expected to maintain a broad consolidation channel between 1,200 and 1,300 points. — VNS