Stock market awaits support factors for breakthrough

June 24, 2024 - 06:52
Both benchmark indices recorded a slight weekly increase, with the VN-Index and HNX-Index each rising by 0.16 per cent.
Investors monitor stock market developments at the Hồ Chí Minh City Stock Exchange (HoSE). — VNA/VNS Photo

HÀ NỘI — The stock market traded in a sideways trend last week, with continuous fluctuations testing investors' patience as expectations for a market breakout to reclaim the 1,300-point peak did not materialise.

Additionally, trading volume was below the 20-day average, indicating a cautious sentiment among investors.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,282.02 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 244.36 points.

Both benchmark indices recorded a slight weekly increase, with the VN-Index and HNX-Index each rising by 0.16 per cent.

Liquidity on HoSE saw a slight drop, with the market's trading value reaching VNĐ23.4 trillion per session (US$919 million), reflecting a marginal 4.4 per cent decrease from the previous week.

Foreign investors continued to sell heavily, with net sales of around VNĐ1 trillion per session from June 17-21. Blue-chip stocks were the main focus, particularly FPT shares, which accounted for one-fourth of the net sales. On HoSE, foreign investors sold off stocks for five consecutive sessions, with a total net sale of 139.8 million shares worth VNĐ4.9 trillion, increasing by 1.64 per cent in volume but decreasing by 10.1 per cent in value compared to the previous week.

Nguyễn Khắc Thành, an analyst at Saigon-Hanoi Securities (SHS), observed positive signals in the market, noting that the VN-Index frequently tested the strong support level around 1,270 points and subsequently rebounded to the 1,280-point area. However, liquidity decreased on both exchanges compared to the previous week, reflecting investor caution during the expiration week of derivative contracts and ETF portfolio restructuring.

After a week under adjustment pressure, the market experienced strong volatility around the 1,300-point resistance level, corresponding to the upper boundary of the mid-term trend line. Thành noted the market traded within a narrow range of 1,270-1,285 points for five sessions. SHS data indicate that the 1,285-point level is the highest since September 2022 and May 2024.

The VN-Index closed the week above the 20-day average level of around 1,280 points, with highly differentiated trading activities and reduced liquidity. Thành expects the VN-Index to continue accumulating within the 1,250-1,300-point range, with a balance around 1,280 points. The current movement suggests an expectation for the VN-Index to surpass the 1,285-point level, aiming to return to the 1,295-point resistance area. In a less optimistic scenario, the VN-Index might trade between 1,250 and 1,280 points.

The Vietcombank Securities (VCBS) analysis team highlighted that gold prices had surged to a two-week high due to signs of economic weakening in the US. Specifically, global gold prices rose sharply on June 20 after data indicated a slowdown in the US economy, reinforcing expectations that the Federal Reserve (FED) might begin cutting interest rates in September. Analysts noted that bullish speculators have regained dominance in the gold market, targeting prices above $2,400 per oz. Meanwhile, major central banks remain cautious on interest rates.

Domestically, VCBS analysts observed that the VN-Index closed the week with a slight decline, reflecting cautious sentiment in the 1,270-1,290 points range. Technically, indicators remain unclear, suggesting the market needs more time to find a balance point. However, significant short-term volatility risks are not a major concern. — VNS