HÀ NỘI — Investors may keep betting on bank stocks this week, securities firms said, but selling pressure may weigh on the market’s overall performance as local stocks are considered as being overbought in recent days.

The benchmark VN Index on the Hồ Chí Minh Stock Exchange climbed 1.91 per cent last week to end at 1,004.12 points, the highest level since October 5, 2018.

The HNX Index on the Hà Nội Stock Exchange gained total 2.05 per cent in all five trading sessions last week to finish at 110.44 points, setting a peak since October 10, 2018.

The VN Index edged down 0.43 per cent on Friday while the HNX Index rose 0.39 per cent.

An average 273.4 million shares were traded on the two local bourses in each session last week, worth VNĐ5.62 trillion (US$241.5 million).

The two local stock indices were lifted by improved investor sentiment to conquer their previous highs set last October.

“Market trading liquidity is kept above the 20-day average and it proves capital inflow is well-maintained during the week,” Sài Gòn-Hà Nội Securities (SHS) said in its weekly report.

Net foreign buying for 11 million E1VFN30 fund certificates supported the market, SHS said, adding the VN30-underlied futures increased in all four terms to narrow gaps with the large-cap VN30 Index to between zero and three points.

“Investors seem more confident in the market’s short-term uptrend,” SHS said. “The chance of a market correction is unlikely because the supportive range of 1,000-1,005 points will trigger bargain-hunting.”

Large-cap stocks continued performing well even though they were shaken by the quarterly portfolio review of the two exchange-traded funds (ETFs) – FTSE Vietnam ETF and VNM ETF.

“There is a big chance for the market to progress now as pressure of ETFs’ trading is over and the global markets are also well-performing. Technical indicators also support the market trend,” MB Securities (MBS) said.

Leading the market last week was the financial-banking sector, as local bank stocks increased by 3.64 per cent after a week.

Vietcombank shares (VCB) gained total 5.1 per cent last week and total 25 per cent since late December to climb to a six-month high of VNĐ66,000 per share at the end of the week.

Bank for Investment and Development of Vietnam shares (BID) rose 9.4 per cent last week to VNĐ37,200 per share. Its shares have increased by nearly 35 per cent since October 30, 2018.

The market would make its next step forward on the back of bank stocks, according to analyst Nguyễn Hữu Bình. “At the current price levels, bank stocks have room to advance.”

The VN Index may move up to 1,025 points this week, another previous peak set in last October, SHS forecast.

A possible up-side-down

Despite technical indicators and market sentiment being positive, some analysts and securities firms have warned of a possible downturn as local stocks have gained strongly, leading some to take the chance to lock in their profits.

According to Agribank Securities Co (Agriseco), there are some indicators that show the market may encounter a tough week ahead.

“Buying power seems weaker to the end of the week, given the VN Index gained slower on Tuesday-Thursday and eventually fell on Friday, investors are moving to mid-cap and small-cap stocks, stocks are overbought… They show the growth of VN Index is depleting,” the company said.

As investors tend to switch to mid-cap and small-cap stocks, this may indicate the market is entering the last stage of its uptrend, said Trương Hiền Phương, director of KIS Vietnam Securities Co.

A marker growing cycle begins with strong investment flowing in large-cap stocks to drive the index forward. When other investors see opportunities and jump in the market, the initial capital flow will move to mid-cap, and then small-cap stocks, before the market starts correcting.

According to Lê Đức Khánh, head of market strategy at PetroVietnam Securities Inc, not every large-cap stock advances as capital flow is directed into different sectors.

“The market is moving up with hesitation, worries and caution and investors are not quite confident enough at the moment,” he told tinnhanhchungkhoan.vn. – VNS