The VN-Index may face profit-taking pressure in the early trading sessions next week before attempting to reclaim the resistance level of 1,250 points, while the VN30-Index may require a correction before testing the 1,290-point zone, according to the Head of Analysis at Sài Gòn-Hà Nội Securities (SHS).
Investors analyse stocks in Hà Nội. — VNS Photo Tiendat
Following the previous recovery momentum, the stock market witnessed a week filled with various emotions.
Although the new week began with a gain, trading moved sideways for the next three sessions, and concluded the week with an "explosive" session.
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index closed the week at 1,252.23 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 235.15 points.
Both indices recorded weekly gains, with the VN-Index increasing by more than 2.3 per cent and the HNX-Index by 2.5 per cent.
The average daily transaction value across the market was VNĐ14.93 trillion (US$596 million) per session, a 12.5 per cent decrease compared to the VNĐ17.07 trillion recorded in the previous week.
The market saw active net buying by foreign investors, with a value of VNĐ1.073 trillion on the HoSE and VNĐ40 billion on the HNX.
Phan Tấn Nhật, Head of Analysis at Sai Gon-Ha Noi Securities (SHS), noted that the short-term trend of the VN-Index has become more positive. The index is regaining the strong psychological support level of 1,250 points after breaking through the short-term downtrend line.
However, the VN-Index may face profit-taking pressure in the early trading sessions next week before attempting to reclaim the 1,250-point resistance level. Similarly, the VN30-Index may need to correct before testing the resistance zone around 1,290 points.
In the medium term, Nhật believes that the VN-Index is still fluctuating within a wide range of 1,180-1,300 points (since the beginning of the year). If the index can surpass the resistance level around 1,250 points, there is hope for a return to the accumulation channel of 1,250-1,300 points.
Nhật said: "With the convergence of short-term and medium-term trends of the VN-Index at the 1,250-point level, this is a significant resistance level and not easily overcome, as it is likely to encounter selling pressure from previous accumulation.
"Therefore, the market needs strong positive macroeconomic factors to provide support."
According to a report from Viet Dragon Securities, in the first half of the year, Việt Nam's stock market witnessed strong net outflows from foreign investors, following the general trend of frontier and emerging markets. This was due to the divergence in monetary policies between the US Federal Reserve (FED) and most other central banks.
Additionally, China's economy reported slower-than-expected growth, signs of deflation, and a continued downturn in the real estate sector. These factors negatively impacted foreign investors' confidence in Asian stock markets.
Meanwhile, domestic individual investors continued net buying, supported by a sustained recovery in profits (from late 2023 to the first quarter of 2024) and a reduction in deposit interest rates due to monetary policy support from the government.
The analysis team at Viet Dragon Securities highlighted that this created an attractive investment yield differential between the stock market and traditional investment channels compared to the past.
As a result, the stock market saw a significant influx of new investors in the first half of the year, along with substantial capital inflows driving market gains. In the long term, the reasonable range for the VN-Index is expected to be between 1,236-1,420 points, reflecting the growth in full-year 2024 business results (compared to 2023).
The analysis report suggests that after a swift and strong correction in the first half of the year (mainly following global stock market trends), the stock market is likely to stabilise.
In the second half of 2024, as the economy continues to recover in a favourable monetary policy environment, and businesses maintain solid profit growth, these factors will serve as drivers for the stock market to recover soon. — VNS
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