Investors conduct transactions at a trading floor in Hà Nội. — VNA/VNS Photo

HÀ NỘI — The domestic stock market traded actively in the first quarter of 2024, with liquidity ranging between US$1-2 billion. This helped numerous stocks in key sectors reach their previous peaks and even exceed historical trading records.

The VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) closed last week at 1,284.09 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 242.58 points. 

For the week, the former gained slightly 0.18 per cent and the latter rose 0.3 per cent. Both indices soared in the first quarter of the year, of which the VN-Index climbed 13.64 per cent from the end of 2023 while the HNX-Index jumped 4.99 per cent. 

In Q1, the VN30-Index, which tracks the 30 biggest stocks on HoSE, showed a robust trading performance, surging by 14.62 per cent. This strong momentum led the VN-Index to break through crucial resistance levels at 1,200 and 1,250 points.

Last week, the liquidity on HoSE decreased 18.3 per cent from the previous week to more than VNĐ124 trillion (US$5 billion). However, this was an average level of liquidity. The decline can be attributed in part to an unprecedented incident where VNDirect Securities Corporation experienced a disconnection from the exchange for the whole week.

Foreign investors also had their strongest net selling week since the beginning of 2024, with a total value of over VNĐ4.5 trillion.

Throughout the week, the market traded within a narrow range from the support level of 1,265 points to the resistance level of 1,295 points.

Saigon-Hanoi Securities JSC (SHS) said that the market welcomed significant developments last week, including the market classification report from FTSE Russel. 

According to the report, Việt Nam is maintained on the watchlist and upgraded from Frontier Markets to Secondary Emerging Markets.

Meanwhile, the Consumer Price Index (CPI) for March decreased by 0.23 per cent compared to the previous month. However, it increased by 1.12. per cent from December 2023 and 3.97 per cent from the same period last year.

However, SHS also noted that while the growth outlook is improving, weak credit growth indicates a limited capacity for capital absorption in the economy. Challenges persist in the real estate and bond markets, which have yet to undergo significant transformations.

The global economic situation remains unpredictable, with overall instability and low growth, particularly in such European Union (EU) countries as France, Germany, the Netherlands and the UK, which are experiencing economic downturns.

On a positive note, inflation has stabilised and the US Federal Reserve has signalled a pause in interest rate hikes, possibly considering a rate-cutting cycle in 2024. 

Given the mixed macroeconomic conditions, SHS suggests that the market's pursuit of equilibrium to accumulate.

According to SHS, the VN-Index is facing significant volatility as it approaches the strong resistance level at 1,300 points. 

In the short term, the index has the potential to break through this level, but it may require further accumulation. 

“If that happens, we might see more fluctuations and consolidation, with 1,250 points serving as a reliable support level. SHS believes that even if there are more ups and downs and consolidation in the short term, it will ultimately strengthen the accumulation nature of the market,” SHS said.

Analysts from Vietnam Construction Securities JSC said that the positive aspect is that liquidity remained at a high-level last week, surpassing the 20-day average, despite the lack of liquidity at VNDirect. 

Technical indicators are also supportive of the market's upward trend. CSI anticipates that the VN-Index will aim for a resistance range of 1,317 - 1,325 points in the next few weeks. — VNS