The upward momentum of the stock market continued to be maintained in the past week, although investor sentiment was somewhat cautious in the face of US-Iran tensions and concerns about disruptions to the global energy supply chain.
Domestically, VN-Index recorded another week of increase of more than 36 points, despite the diễn biến of alternating increasing and decreasing sessions.
Liquidity tends to narrow, with an average trading value of 5 sessions around 21,000 billion VND on HOSE, reflecting a cautious sentiment when the market approaches the old peak and before the holidays.
Although the index continued its recovery trend, the market breadth showed signs of narrowing. The main upward momentum came from some pillar stocks, notably the group of stocks belonging to the Vingroup ecosystem, with VIC and VHM contributing more than 45 points to VN-Index. The spread also appeared in some large-cap bank stocks such as VCB, BID, CTG, TCB but quickly weakened due to lack of consensus between other industry groups.
In the opposite direction, adjustment pressure tends to spread wider, concentrated in energy groups (oil and gas, electricity), chemicals, food - beverages and retail, thereby partly eliminating the positive impact from the leading group.
The fact that the index increased to a high zone but liquidity decreased shows that demand is no longer really decisive, while the market breadth is narrowing, reflecting that cash flow does not spread but only focuses on some large-cap stocks.
This is a signal to be cautious, because when the index is supported by the pillar group but most stocks do not agree, the risk of reversal usually increases.
The average liquidity currently only fluctuates around 20,000-25,000 billion VND/session, although there are sessions of strong increase to nearly 29,000-30,000 billion VND. Meanwhile, the market size has become much larger after capital increases. This is still not enough to activate a strong and widespread upward trend.
Experts assess that the market needs a vibrant and sustainable liquidity level, at least about 30,000-35,000 billion VND/session, to confirm the real upward momentum.
Looking at it from a broader perspective, for large cash flows to return and improve market breadth, the prerequisite is that the risk level needs to be confirmed to have cooled down.
The first factor is that there needs to be a macro story or a policy strong enough to spark trust.
The most anticipated is the cooling down of the exchange rate and interbank interest rates. This is the biggest bottleneck currently. If the State Bank of Vietnam has successful exchange rate stabilization measures without increasing operating interest rates, cash flow will shed the biggest psychological burden.
The second factor is that foreign investors need to reduce net selling pressure. In the context of the market in the highlands, if foreign investors continue to net sell large stocks, domestic investor sentiment will be affected.
The third factor is that business results must be convincing enough. The market is no longer in the overvalued zone, so investors will demand confirmation from business profits. If Q1 business results or Q2 prospects do not create positive surprises, cash flow will be difficult to return strongly, especially in groups that have increased before expectations.
Therefore, if leading industry groups (Banking, Securities, Steel, Real Estate) adjust to the low valuation zone compared to the growth potential, large demand will be automatically activated.
