The stock market last week experienced a significant correction when VN-Index lost nearly 45 points (-2.31%) and officially lost the psychological milestone of 1,900 points, closing the week at 1,877.13 points.
Pressure comes from the simultaneous weakening of pillar stocks and record net selling from foreign investors. The strong net selling by foreign investors in the past week partly reflects the trend of shifting global capital flows, especially in the context of increasing bond yields in developed markets and declining global risk appetite.
However, this is not the main reason.The core factor creating pressure on the market today comes from macroeconomic risks that are still present, including exchange rate pressure, geopolitical fluctuations and concerns about slowing global economic growth.
These factors are putting general psychological pressure on the entire market, making investors more cautious after the period when the index continuously peaked.As a result, many stocks are trading with high discounts compared to the peak zone and general cash flow tends to choose a defensive option - prioritizing holding cash.
Therefore, the net selling move of foreign investors should be seen as a manifestation of synergy with the general sentiment, rather than a signal to re-evaluate the valuation of the Vietnamese market.
It can be said that the upward trend of VN-Index in the past 2 months has largely come from the impact of the Vingroup group (especially VIC and VHM), the rest of the market is mostly a downward or sideways trend that is unpredictable. Therefore, when the Vingroup group adjusts, the pressure on the index is very clear. In the context that liquidity has not improved in most industries, this pressure spreads very quickly.
Currently, the 1,830 (+-10) point zone is assessed by experts to be a near support zone that needs to be monitored. The driving force for VN-Index to form a technical recovery moment is that there must be selling pressure to cool down in the large-cap group. However, currently, the above signal has not been seen and net selling activities of foreign investors are still being maintained, so the scenario of the index continuing to decrease is still likely to be higher.
Investors need to wait for the market's reaction at the 1,840 point zone before clearly determining. In case VN-Index loses this support zone with high liquidity and market breadth continues to worsen, the risk of adjustment to the 1,800 point zone, even deeper, needs to be considered.
In the context of 2/5 of the most influential industry groups such as banking and real estate weakening in the past week, it is relatively difficult to expect the market to soon see a breakthrough increase and spread widely.
When the leading groups have not regained their supporting roles, cash flow is likely to tend to find alternative industry groups, which are less sensitive to the general index and have their own story. Accordingly, some topics such as public investment or commodity price movements may return, becoming the highlight of the market.
Profitable industry groups such as construction, building materials, minerals, rubber, animal husbandry or some stocks associated with basic resources may attract the attention of cash flow in the short term.
