|Investors watch transactions at PetroVietnam Technical Services' stock trading floor in Ha Noi. Most analysts predict shares will continue their uptrend this week due to the support of strong money inflows and foreign purchases. — VNS Photo Truong Vi
HA NOI (VNS) — The market will face high profit taking pressures this week, though most analysts predict shares will continue their uptrend, due to the support of strong money inflows and foreign purchases.
After the slump on Monday, the market rose strongly during the following four sessions last week, which helped the VN-Index on the HCM Stock Exchange gain a cumulative 4.54 per cent over the week, ending Friday at 561.82 points.
On the Ha Noi Stock Exchange, the HNX-Index grew by a more modest 1.71 per cent over the week, finishing Friday's session at 79.55 points.
Additionally, both blue chips and speculative stocks maintained their growing momentum.
Vietcombank (VCB), Vietinbank (CTG), BIDV (BID), Saigon Securities Inc (SSI), PetroVietnam Drilling and Wells Service (PVD), VinGroup (VIC), Hoang Anh Gia Lai Co (HAG), Bao Viet Holdings (BVH) and PV Gas (GAS) attracted strong investments.
The VN30, which tracks the top 30 shares by market value and liquidity in the HCM City's market, also climbed 4.4 per cent to end at 586.58 points.
Liquidity showed strong improvements on the two markets. The daily trading volume in HCM City soared 40 per cent over the previous week, averaging almost 112 million shares, worth VND1.715 trillion (US$79 million) per session.
The figure on the Ha Noi bourse was 50 million shares, valued at VND545.3 billion ($25.1 million) per day, up 23 per cent, compared with the previous week's level.
Strong buys by foreign investors also stimulated domestic investments. The foreign sector returned as net buyers on the two markets last week, collecting shares worth a combined VND517 billion ($23.8 million), of which they invested VND405.2 billion ($18.7 million) in the HCM City bourse.
According to analysts, the market is used to growing after a steep decline period, and inexpensive prices of many respected shares aroused bargain investors. In addition, oil prices rising again had positive impacts on trades of oil and gas stocks.
"In addition to the technical rebound after a sharp downtrend, the market was backed by two major factors, including the possibility of expanding foreign holding limits in listed companies and the improvement in the Trans-Pacific Partnership negotiations," analysts at Bao Viet Securities Co wrote in a report.
"These are ‘old stories' but with new advancements and soon-to-be adopted possibilities in the near future, these factors would be expected to support the uptrend in the medium term," they said.
However, analysts predict the market will face short-term selling pressures this week and advised investors to be cautious in trading near technical resistance levels of the indices.
Meanwhile, profit-taking activities began to appear in the last two sessions of last week, which slowed the market's expansion. This pressure climbed on Friday and narrowed the growth of most shares.
"We retain a cautious view on concerns of rising profit taking pressures in the first sessions of this week's trades. The next resistance level of the VN-Index will be at 565 points, while that of the HNX-Index will be 80-80.5 points," analysts at KIS Vietnam Securities Co wrote in a note. — VNS