After a few recovery sessions, the stock market experienced a turbulent trading session again. The strong selling pressure at the end of the session, especially the group of stocks that played a supporting role, caused the VN-Index to fall sharply.
At the end of the trading session on November 7, the VN-Index decreased by 43.54 points, officially losing the important support level of 1,600 points to 1,599 points. For the whole week, the VN-Index decreased by 40.55 points, equivalent to -2.47%. This sharp decline also makes the Vietnamese stock market the strongest market in Asia.
The market fell sharply in the context of weak liquidity, the matched value on HoSE reached only VND23,560 billion. This partly reflects the clear cautious sentiment of investors at the present time.
The sharp decline of the VN-Index in the trading session at the end of the week surprised investors somewhat. The entire increase in the past three months has been "inflated", bringing the VN-Index to its lowest level since the beginning of August. Since the peak, the index has lost more than 160 points.
quickly assessing the reasons affecting the market, experts said that the sharp decline in the market is due to the increased profit-taking pressure after a period of strong increase. In recent sessions, continuous liquidity at low levels reflects investors' caution in the face of a series of variables.
In the current context, just a small negative signal is enough to trigger a strong sell wave, especially when pillar stocks fall sharply, causing a spillover effect throughout the market. The pressure of call margin appeared at the end of the session, further reducing the momentum.
Experts from Dragon Capital Securities Company (VDSC) recently warned that the market margin usage rate is at its highest level since the beginning of 2022, while the VN-Index valuation has exceeded the P/E threshold by 18 times. Strong disbursement in this price range no longer brings a clear safe edge.
VDSC believes that the market is in a "resting in the middle of the wave" period, when the valuation and growth expectations have mostly reflected positive business results. Key industry groups such as banking, real estate, and securities all reported interest rates increasing by more than 25%, but this also caused stock prices to approach the high range.
Some macro factors are putting pressure on the market. The USD/VND exchange rate tends to increase, the gap between the free and official markets has reached nearly 200 VND/USD. The yield on the 10-year government bond increased to about 3.1%, the highest level in 18 months. Corporate capital costs are expected to increase slightly due to high credit demand during the year-end business season.
According to VDSC, this period requires investors to stay calm, observe and wait for a more reasonable time to disburse. The market is still in a medium-term uptrend, but in the short term, there is a need for technical adjustments. Investors should limit the use of high leverage and only choose businesses with a solid financial foundation.
When the proportion of individual transactions is too high and margin increases sharply, the market is prone to unexpected fluctuations if there is bad news. At present, investors should be patient and risk management is more important than finding short-term profits, VDSC recommended.
VDSC believes that although the VN-Index may fluctuate around 1,600 - 1,650 points in the short term, the medium-term uptrend will still be maintained. However, the disbursement should be selective and disciplined. Investors should maintain the proportion of stocks at 50 - 60% of their portfolio, prioritize banks with good asset quality, energy and consumer goods, and limit the use of high margin.
According to VDSC's analyst, the market is in the process of testing its strength after reaching a peak. Staying calm, observing carefully and taking action when opportunities are clear will help investors preserve their achievements and be ready for the new cycle.
