Market expects corrections after week of gains

Update: April, 20/2015 - 08:12

Investors watch market movements at the FPT securities trading floor in Ha Noi. — VNS Photo Thai Ha

HA NOI (VNS) — Most stock analysts retained a positive view on the market this week, but predict the market remains turbulent and might see downward corrections in the early sessions.

Also, any downward trend might be due to profit-taking pressures following a week of gains, analysts noted.

Last week, both stock indices closed in the green on the two exchanges, propped up by the recovery of large-cap shares, as well as strong purchases by the foreign sector.

"According to our observation, investors' psychology has improved over each session. Besides, continuous net buying by foreign investors with increasing volume on both exchanges will maintain the market momentum," analysts at SHB Securities Co wrote in a note.

On the HCM City Stock Exchange, the VN-Index gained a cumulative 2.58 per cent to close the week at 568.32 points. Meanwhile, the HNX-Index on the Ha Noi Stock Exchange added 0.76 per cent over the week, ending Friday's session at 83.61 points.

Also, solid gains of blue chips, especially oil and gas shares, provided impetus to the market.

Along with growth in oil prices on the global markets, oil and gas stocks climbed substantially, including PetroVietnam Drilling and Wells Service Corp (PVD), PV Gas (GAS), PetroVietnam Technical Services Corp (PVS) and Petroleum Equipment Assembly & Metal Structure (PXS).

Other heavyweight stocks, such as Masan Group (MSN), Vinamilk (VNM) and VinGroup (VIC), also had a positive trading week.

The VN30, which tracks the top 30 shares by market value and liquidity on the HCM City's market, also climbed 2.71 per cent through the week, finishing Friday at 599.12 points.

Liquidity also perked up. The daily trading volume on the HCM City Stock Exchange rose over 4 per cent against the previous week, averaging more than 86 million shares worth nearly VND1.66 trillion (US$76.9 million) per session.

On the Ha Noi Stock Exchange, daily volume increased by 24 per cent over the previous week, reaching 46.5 million shares valued at VND609.4 billion ($28.2 million) per day.

However, the market is likely to undergo an adjustment phase early this week, after a long rally. The Vn-Index exceeded the landmark 570 points several times last week, but demand was not strong enough to provide a further boost to the market.

Profit-taking sell-offs late last week caused many blue chips to decline, building more pressure on the market this week.

"There should be a correction to test the psychological landmark of 560 points. The adjustment phase can happen this week and Monday's trades might see strong fluctuations and likely end in the red," Maritime Bank Securities Co's analysts wrote in a note.

Performance will be mixed on different stocks, depending on the business results of their companies. Analysts said information about first-quarter results and annual shareholders' meetings would continue to influence the market, in the short term.

Foreign trades will likely be a support factor as their net buys, which were worth some VND1 trillion ($46.3 million) on the two markets through last week, contributed largely to the market uptrend.

They poured VND924.5 billion ($42.8 million) into the HCM City's market last week, with a focus on blue chips, such as BIDV (BID), Vietcombank (VCB), Vietinbank (CTG), MSN, VIC and PVD. In the meantime, they disbursed VND75 billion ($3.5 million). — VNS