A trader talks to investors at an office of VNDirect. Photo bnews.vn

HÀ NỘI — The domestic stock market set a weekly gain despite strong fluctuations during the week.

The market is expected to receive support from a clearer economic recovery outlook and positive anticipated business results in the first quarter of 2024. Meanwhile, the domestic capital flow stays strong, driven by low-interest rates and expectations of a market upgrade.

This week, the benchmark index is expected to be affected by the US Federal Reserve (Fed) policy meeting, according to experts. 

The VN-Index on the main exchange, the Hồ Chí Minh Stock Exchange (HoSE), began last week with a correction to around the 1,235 point-level, followed by a strong recovery in the next two sessions, surpassing the highest level set in 2023. 

However, in the final two sessions of the week, the index faced a rising sell-off force at the strong resistance level of 1,280 points, leading to significant volatility as it retested the support zone at 1,255 points. The VN-Index closed the week at 1,263.78 points. 

Similarly, the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 239.54 points. 

For the week, the VN-Index still gained 1.32 per cent while the HNX-Index rose 1.36 per cent. 

There was an improvement in trading liquidity as the market recorded a trading value of more than VNĐ30.1 trillion (US1.2 billion) per session, up 15.7 per cent over the previous week.

Foreign investors resumed heavy net selling. The activities were attributed to the restructuring in the three largest foreign exchange-traded funds (ETF) on the market, including VNM ETF, FTSE Vietnam ETF and Fubon ETF.

As a result, they net sold a value of over VNĐ2.8 trillion.

VNDirect Securities Corporation said that the stock market was gearing up for an important trading week as the Fed was set to hold a monetary policy meeting on March 19-20. During the meeting, the VN-Index might retest the resistance zone around 1,280 points.

Should the Fed decide to keep the current interest rate unchanged in the upcoming meeting, the event's significance would not wane as all eyes would be on the Fed Chairman's speech.

Market expectations were centred around fresh insights into the Fed's future action, particularly regarding the expected timing and extent of rate reductions for the year.

"If the Fed's scenario is not too hawkish compared to the market's previous expectations with interest rate cuts started in the second quarter and at least three rate cuts in 2024, then we can fully expect a positive reaction from global financial markets," said VNDirect. 

Domestically, the stock market showed a less negative response to the State Bank's treasury bill issuance. This can be attributed to several supportive factors, including a noticeable economic recovery outlook, anticipated positive business results in the first quarter and strong domestic capital flow due to low interest rates and market upgrade expectations.

According to the central bank, overall credit in the economy decreased by 0.72 per cent as of the end of February. However, credit for the real estate sector increased by 0.23 per cent while credit for the securities sector saw a significant growth of 2.56 per cent from the end of 2023.

The securities firm suggested that the market's upward trend would remain intact and the VN-Index might retest the resistance zone around 1,280 points this week. 

Against the backdrop of a global stock market decline prior to the Fed's meeting, the Vietnamese stock market experienced significant volatility. — VNS