After two sharp downward corrections last weekend, the stock market entered the first trading session of the new week with signs of recovery. However, the market suddenly reversed when the cautious sentiment of both buyers and sellers appeared and caused the market to switch to quite gloomy trading.
Profit-taking pressure in the oil and gas group reoccurred, causing the index to quickly reverse direction and maintain red for most of the remaining time.
VN-Index closed the first session of the week on March 16 at the threshold of 1,693 points, down another 3 points compared to the reference level. Market liquidity is also quite low. HoSE reached a trading value of less than 23,000 billion VND, a sharp decrease compared to the level of more than 27,000 billion VND in the last session of the previous week. SHB is the only stock to achieve trillion VND liquidity.
Foreign investors also sent negative signals when extending the net selling streak for 3 consecutive sessions. This group sold off more than 3,640 billion VND, while buying in less than 2,300 billion VND, the lowest level since the beginning of the year.
Almost all oil and gas stocks listed on the exchange today closed below the reference price. BSR and PVD led the downward amplitude when both touched the floor, closing the session in a state of no buyers, with outstanding selling volume of about 7 million and 1 million shares respectively. Two leading market capitalization codes including GAS and PLX also adjusted more than 3.5%.
PVOil's stock recorded a correction of more than 10%, down to 17,800 VND. Fertilizers, an industry group related to oil and gas, also faced strong selling pressure. DCM, DPM and BFC all decreased to the full range and "white buyers". DGC of Duc Giang Chemicals also lost more than 4.5% after a strong increase last week.
Against the market flow, most real estate stocks closed in green. NVL continued to increase to the ceiling price of 13,500 VND, while NLG also accumulated over 6%. Stocks related to Vingroup such as VIC, VHM and VRE all increased points, fluctuating between 0.1-2.6%. Similarly, the construction group simultaneously increased sharply, in which CTD led the wave with an increase of more than 3%.
Considering the cash flow developments, the oil and gas group, which once played a leading role in the market, is temporarily ending its leading role and may need more time to find a new balance zone. Meanwhile, the fertilizer group with representatives such as Ca Mau Fertilizer and Phu My Fertilizer still maintains an upward trend thanks to benefiting from global urea prices, but profit-taking pressure has appeared and holding these stocks should be short-term.
Experts assess that VN-Index is facing many risks from oil price fluctuations and global macroeconomic factors. In the context of weakening technical signals, the 1,600 point zone is expected to play an important supporting role for the market.
If geopolitical tensions last for 4 - 6 weeks, pushing Brent oil prices to maintain in the range of 80 - 100 USD/barrel, the domestic CPI may be pushed up to 3.5 - 3.6%. The inevitable consequence is that the State Bank's monetary easing room will be narrowed, and it is even possible that it will have to adjust the operating interest rate up by an additional 0.25-0.5% to cope with inflation risks and exchange rate pressure when the Fed delays its interest rate reduction roadmap.
Besides macroeconomic pressure, the financial health of businesses is also facing a major challenge when input costs increase sharply, eroding gross profit margins. On the stock market, investor sentiment is suffering from double negative impacts: on the one hand, from the decline of the global market due to concerns about astagflation scenario, and on the other hand, from concerns about economic recession.
The shift to a defensive state causes cash flow to withdraw from industry groups sensitive to production costs, creating widespread adjustment pressure. In general, the current oil price movements are playing a major role as a pressure on the market in the short term.
