Market will continue to breach new highs, but investors should be more cautious: Experts

May 31, 2021 - 07:52
The market witnessed a strong buying interest from market participants last week. Analysts from many securities firms expected that indices will continue to head new highs, but warn investors to be more cautious.
Statues of bear and bull market ỉn front of the Hồ Chí Minh Stock Exchange (HoSE)'s building. — Photo

HÀ NỘI —  The market witnessed strong buying interest last week and analysts from many securities firms expect indices to continue to hit new highs, but have warned investors to be cautious.

The benchmark VN-Index broke the historic peak of the 1,300 point-level last Tuesday, boosted by bank stocks. The index kept breaching new highs and finished the week at 1,320.46 points. The HNX-Index ended last Friday at 310.46 points.

That was the highest close for both benchmarks in history.

For the week, the VN-Index gained 1.73 per cent, while the HNX-Index rose by 3.37 per cent. 

Market liquidity also broke the record level of VNĐ31 trillion (US$1,35 billion). Of which VNĐ24.8 trillion ($1.1 billion) was poured into the Hồ Chí Minh Stock Exchange (HoSE), causing overloading issues in recent sessions. 

According to MB Securities JSC, with the current strong cash inflows, the market is likely to extend its rally to higher levels.

Analysts from SSI Securities Corporation (SSI) were also optimistic about the market this week as there are signs supporting the current upward trend of the VN-Index. 

“There is a possibility that the index will continue to edge higher to 1,350 - 1,400 points, so corrections in the short term, if they happen, will create chances for investors to increase stock proportion in their portfolios,” SSI added. 

On the technical front, BOS Securities Corporation said that the VN-Index resurged after testing the 1,300 point-level again. The strong cash flows are the market’s driving force and technical indicators also support the bull market.

Therefore, the VN-Index may keep its upward trend in the near future and head toward the next resistance zone of 1,340 points, BOS forecasts.

Meanwhile, some securities firms have a more cautious view of the market this week. 

According to Saigon - Hanoi Securities JSC, the market recorded a fourth straight weekly gain on strong cash inflows and investors’ bullish sentiment. But as the VN-Index closed the week above 1,320 points, it can be considered as a strong tug-of-war between buyers and sellers in the near future.

The area of 1,320 - 1,325 points is vulnerable territory to the VN-Index, so investors should be more careful this week, SHS suggests. 

Analysts from SHS expect fluctuations might reappear when rising pressure from profit-taking activities weigh down the market.

Last week, bank stocks led the market and gained 5.8 per cent in market capitalisation. Many stocks rose than 1 per cent, such as VPBank (VPB), Vietcombank (VCB), MBBank (MBB), Asia Commercial Bank (ACB), Vietinbank (CTG) and Techcombank (TCB).

It was followed by stocks in the material sector, up 4.8 per cent in market capitalisation due to pillar stocks like Hoà Phát Group (HPG), Nam Kim Steel JSC (NKG) and Hoa Sen Group (HSG).

Other stocks from the healthcare and pharmaceutical sector, information technology and the utilities sector also climbed more than 1 per cent in market capitalisation. 

However, foreign investors were still net sellers last week, with a net sold value of VNĐ270 billion ($11.7 million). The amount was much lower than that of the last few weeks, which witnessed a net sold value of trillions of dong. — VNS