HÀ NỘI — Vietnamese stocks are forecast to stay on a downward trend this week due to caution among investors and accelerated selling pressure from foreigners, analysts said.

The benchmark VN Index on the HCM Stock Exchange (HOSE) dropped 2.23 per cent on Friday, or 22 points, to end at 963.90 points, totalling a weekly loss of 7.37 per cent.

The VN-Index hit its lowest level since the beginning of the year while the HNX Index on the Hà Nội Stock Exchange lost 2.21 per cent to close at 114.49 points on Friday.

The northern market index fell a total 5.6 per cent in the week.

An average of 194.1 million shares were traded in each of the five trading sessions last week, worth VND5.3 trillion (US$232.4 million).

Daily average trading figures last week decreased by 21 per cent in volume and 52 per cent in value compared to the previous week.

According to Đặng Thanh Thế, strategic director of KB Securities Co, if temporarily excluding the transactions volume of Vingroup VIC, the current largest stock by market capitalisation, foreign investors have changed from net buyers to net sellers since April.

“Obviously, this trend has not seemed to stop and completely contrasting with the situation in 2017 and the first quarter of 2018,” Thế told tinnhanhchungkhoan.vn.

“Therefore, there are grounds to conclude that selling pressure from the foreign traders on the key stocks will keep occuring next week, and thus the bearish trend of the market will continue,” he added.

In addition, market liquidity from the beginning of May has fallen sharply compared to the average figure of the period from 2014 to present, even lower when compared with the first quarter of 2018.

This week, markets will likely remain gloomy and the bearish trend will increase stronger and even spread to small- and mid-cap stocks, Thế said.

“At present, net selling pressure of foreign investors is still very strong and steady,” said Nguyễn Trung Du, senior expert at VNDirect Securities Co (VNDS).

The recovery of the market last week was still weak, with just one rebounding session. Therefore, the downward trend is inevitable most stocks and will be oversold, Du told tinnhanhchungkhoan.vn.

According to Nguyễn Ngọc Lan, senior analyst at Agribank Securities Co (Agriseco), the downtrend of the market is developing and there is no sign of a reversal. The short-term market is expected to remain negative.

Foreign investors are still accelerating selling, which seriously affects investors, leading to caution among domestic investors, Lan said.

Investors were quite vulnerable with many failing short-term bottom catches and the market’s quick fall. Investors will keep a close watch on market fluctuations, adopting a wait-and-watch approach with little capital injection.

In addition, many large-cap stocks still have too high valuations and there is still plenty of room for them to fall due to the recent strong increase, she said.

There has also been a lot of negative news related to geo-politics or large listed companies, therefore, investors are more reserved, Lan said.— VNS