|Trading at Hoang Gia Securities Exchange. The national stock market may go through a slight correction this week after the VN-Index rose sharply last week. — VNS Photo Truong Vi
HA NOI (VNS) — Vietnamese shares are expected to see technical downward corrections this week, as profit-taking selling pressures will likely increase after a sharp rebound, stock analysts predict.
Stock indices on the two exchanges climbed strongly in four out of five sessions last week, regaining all of what they lost on "Black Monday".
On the HCM Stock Exchange, the benchmark VN-Index recouped almost 60 points in just four rising sessions last week, ending the 10-day losing streak and surpassing the short-term resistance landmark of 570 points on Friday.
Meanwhile, the HNX-Index on the Ha Noi Stock Exchange registered a more modest growth of just 0.86 per cent throughout the week, closing Friday at 78.27 points.
Both indices lost more than 5 per cent in a single session on Monday, their hardest decline since the beginning of this year.
"After several strong rising sessions, the market will face short-term profit-taking selling pressures in upcoming sessions," analysts at Sai Gon-Ha Noi Securities Co wrote in a report.
Experts noted that this is the time to test the supply-demand forces in the market, as the uptrend would be more stable if there were no additional shocks from external factors in the near future, they said.
"This is a necessary condition to maintain the current rally in the long term period," analysts said.
Viet Nam's stock market witnessed a large loss on Monday following the global stock rout, triggered from steep declines on the Chinese market. Meanwhile, global oil prices dropped to six-and-a-half year lows, dragging down oil and gas shares in the domestic market.
Further, the VN-Index fell 5.28 per cent, while the HNX-Index declined 5.81 per cent on Monday. After hitting a yearly low, shares rebounded on Tuesday due to increasing bargain hunting.
Additionally, liquidity improved substantially in the two markets. The daily trading volume in HCM City jumped nearly 25 per cent over the previous week, averaging 1.54 million shares, worth VND2.57 trillion (US$114.2 million) per session.
In Ha Noi, the market volume also increased 26 per cent over one week ago, averaging over 57 million shares valued at VND560.5 billion (nearly $25 million) per session.
However, the rally did not raise the value of all stocks. Large-cap stocks were the largest gainers with the VS-Large Cap, the index that tracks performance of big companies with market capitalisation of above VND10 trillion ($444.4 million) in the Vietnamese market, developed by financial website, which rose nearly 2 per cent.
At the same time, shares of VN-Mid Cap, VN-Small Cap and VN-Micro Cap all tumbled, with an average loss of 1.45 per cent, 0.99 per cent and 0.86 per cent, respectively.
Oil and gas stocks, the largest victims of the market after global oil plunged steeply, recovered towards the end of the week. Also, information that oil prices climbed over 10 per cent on Thursday triggered strong demand for these stocks.
PV Gas (GAS), the second largest share by market capitalisation, rose over 19 per cent during the week, with three consecutive days of reaching the daily rise limit of 7 per cent.
PetroVietnam Drilling and Wells Service Corp (PVD) also increased 14.2 per cent in the last four rising sessions.
"The market will likely see a slight correction this week after the VN-Index hit the strong resistance range of 560-570 points," analysts of Maritime Securities Co wrote in a report.
They anticipate that the market would still rise slightly on Monday, but fluctuate around 545-550 points in the following sessions. — VNS