HÀ NỘI - Local shares are forecast to continue their uptrend this week, as investors bet on the prospects of third-quarter earnings.

Analysts, however, have warned of possible volatility due to pressures caused by a slump in large-cap stocks and net selling by foreign traders.

"The mid-term is maintained with the target at 700-710 points for the benchmark VN-Index," Trần Đức Anh, analyst at Bảo Việt Securities Co, wrote in a report.

However, due to the weakening of blue chips, as well as the return of net foreign selling pressures in the short term, the two indices can still tumble, Anh said, and noted there being a chance to increase the exposure of having solid third-quarter earnings results.

"The VN-Index will likely accumulate 680-690 points this week, and trading will concentrate on stocks having good earnings prospects," an analyst at Vietnam Investment Securities said.

The VN-Index, the measure of 312 stocks on the HCM Stock Exchange, decreased nearly 0.3 per cent last week, putting a break on a two-week winning run. The Index closed its last trading session at 684 points.

However, the HNX-Index, tracking 378 stocks on the Hà Nội Stock Exchange, increased 0.3 per cent to end Friday’s session at 85.3 points.

Meanwhile, large-cap stocks were under heavy pressure due to sales caused by profit-taking last week. Many of the 30 highest valued stocks lost value and weighed on the market, including real estate giant VinGroup (VIC), steelmaker Hòa Phát Group (HPG), private equity Masan Group (MSN) and Kinh Bắc City Development (KBC).

On the bright side, financial-banking shares performed well. They were among the top three share groups gaining most last week, following heavy industry and pharmaceutical groups. Typical gainers included Vietcombank (VCB), Vietinbank (CTG), BIDB (BID), Sacombank (STB), insurer Bảo Việt Holdings (BVH) and Saigon Securities Inc (SSI).

According to analysts at Saigon-Hanoi Securities Co, investors tend to bet on the shares of big companies with sound financial indicators, as well as those that promised positive earnings in the third quarter, such as banks, securities and real estate companies.

Money also has flown in mid-cap and penny shares, such as auto dealer Hoàng Huy Investment Services (HHS), Faros Construction (ROS) and SMC Investment Trading JSC (SMC). ROS climbed over 30 per cent for the week, becoming the best performer last week, while HHS rose by nearly 23 per cent and SMC increased 18 per cent.

Liquidity rose in the two markets. An average of 130 million shares, worth over VNĐ2.7 trillion, were traded per session on HCM City’s exchange, up 12 per cent over the previous week.

On the Hà Nội Stock Exchange, nearly 43 million shares worth VNĐ524 billion were exchanged per session last week, also up more than 12 per cent over the previous trading week.

Foreign investors returned net sellers in recent sessions. They were responsible for a total net sell value of VNĐ140 billion in the two markets last week.

Analysts were positive on the market outlook after the VN-Index hit 687 points, the highest in the past eight years. Macro economic conditions are favorable and support a sustainable uptrend in the mid-term period, after the Government signaled stronger stimulus policies in order to attain the GDP growth rate target of 6.3-6.5 per cent by year-end. - VNS