A trader watches the market's movements on a computer. — Photo bnews.vn

HÀ NỘI — The consecutive 18-session net selling of foreign investors is currently raising cautious sentiment towards domestic funds, hindering the recovery momentum of the stock market.

However, as the market is in the holiday season with Christmas and the forthcoming New Year, the net selling momentum from overseas investors is likely to cool down, according to securities firms.

Last week, the market’s benchmark VN-Index opened the week on a negative note, then retested the support level at 1,080 points before having four consecutive sessions of gains and returning above the 1,100-point level.

The VN-Index closed the week at 1,103.06 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 228.27 points.

For the week, the former slightly rose 0.07 per cent and the latter was up 0.55 per cent. 

Both stock exchanges witnessed a significant decline in liquidity, with a 17.8 per cent decrease compared to the previous week to over VNĐ70.9 trillion (US$2.9 billion). The trading volume on the two bourses also dropped by 17.1 per cent.

The falls indicated a continued reduction in cash flows as the market entered the final stages of the year. 

The selling pressure from foreign investors persisted, as they recorded a net selling of more than VNĐ2.67 trillion for the seventh consecutive week, following the portfolio restructuring of exchange-traded funds (ETFs). 

The majority of net selling happened on the southern exchange, focusing on sectors such as banking, steel, financial-securities services and real estate. On the other hand, the HNX exchange experienced slight net buying with a value of VNĐ18 billion.

According to Saigon - Hanoi Securities JSC (SHS), there remains a possibility of the VN-Index resuming its upward trend in the final trading week of 2023, aiming for the nearest resistance area of around 1,130 points. However, it is also likely that the index will continue to fluctuate around 1,100 points with low liquidity.

"For short-term investors in the current phase, it is advisable to maintain a low proportion of stocks in their portfolio and closely monitor market developments," said SHS.

In the medium to long term, SHS maintains a forecast that there is a high likelihood for the VN-Index to consolidate within the range of 1,100 - 1,150 points. In a more positive scenario, the mid-term accumulation range could extend from 1,150 points to 1,250 points.

Việt Dragon Securities Company (VDSC) said that despite a weak performance in the last session of the week, the market continues to make efforts to maintain its recovery momentum. 

Although liquidity remains low, it has increased compared to the previous session, indicating some improvement in supportive cash flows while pressure from the supply side was not too large. The selling pressure primarily came from foreign investors.

With a stable condition and gradually increasing supportive cash flows, there is a possibility that the market will surpass the resistance level of 1,105 points and expand its recovery in the near future. However, this recovery is temporarily of a short-term nature, allowing the market more time to retest the supply side at a higher resistance level, such as around 1,120 points.

Meanwhile, Vietcombank Securities Company (VCBS) said that investors should maintain a steady mindset during volatile sessions and not reduce their positions at the current time. 

They may consider restructuring portfolios, increasing allocations, or making new purchases for stocks that are still performing well.

Similarly, BIDV Securities JSC (BSC) said that the VN-Index continues to sustain above the 1,100-point mark but with weak liquidity, indicating that the market is still in a short-term accumulation phase, and the possibility of breakout sessions to reach higher levels remains unclear. — VNS