After creating a short-term peak in the first week of September, the stock market has entered the adjustment phase. In the past week, the VN-Index experienced a volatile trading week with many important information affecting it, notably the story of the FED lowering interest rates and a big step forward in upgrading the market in the coming time.
The VN-Index has continuously faced pressure when it reached its peak around 1,700 points last week, causing the VN-Index to turn down points in the next 4 sessions due to weak liquidity. At the end of the week, the VN-Index decreased by 0.52% to 1,658.62 points, above the psychological support zone of 1,600 points.
From the perspective of experts, before establishing a clear trend, the index often fluctuates around the psychological level for a period of time to test the strength of cash flow. In addition, the sustainability of the trend is combined with profit-taking pressure after a period of rapid increase, especially in banking and securities stocks - stocks that have a great impact on the index and have increased beyond the market average.
This is a tug-of-war process between buyers expecting a market breakthrough to form a new price level and sellers worrying that profit-taking pressure will force the market to adjust again.
According to statistics from VPBank Securities Company, in recent uptrends, every time the market increases by 25-30%, there is a break with an adjustment of 8-10%. Currently, the market needs new information to establish a balance zone. The near support zone can be found in the range of 1,550 - 1,600 points, and further around 1,500 points.
If the adjustment is limited to about 5%, the market will need to rotate to unincreased industry groups such as public investment, real estate, energy, exports - replacing banks and securities that have doubled. In case there is no rotation, the adjustment range can be expanded by 5-10%, bringing the VN-Index to 1,550 points. However, the most likely scenario in September is the index fluctuating in the 1,600-1,700 point range.
Most analysts' recommendations see the correction as a disbursement opportunity. Currently, the amount of cash in investor accounts is not small, the problem is to choose the right group of stocks.
Regarding foreign transactions, last week, foreign investors continued to have a strong net selling week of more than VND6,500 billion, in which the portfolio was still mainly focused on blue chip stocks, especially a stock group code with a net withdrawal of more than VND800 billion, SSI.
Foreign investors are net sellers, domestic cash flow is cautious, making it difficult for the market to break out. However, accelerated credit along with the policy of maintaining low interest rates and the market approaching the upgrading target are expected to support the medium-term trend.
Assessing the movement of foreign cash flow, experts from SSI Securities Company said that in the context of global capital flows moving towards the US and China markets, along with the VN-Index increasing sharply by 32.7% in the first 8 months of the year, the profit-taking activities of foreign investors are understandable.
However, SSI affirmed that the medium and long-term outlook is still positive. The solid supporting factors come from the story of upgrading the market (FTSE and longer term MSCI) and the double-digit GDP growth target for the next 5-year cycle with a comprehensive institutional reform program, focusing on developing the private sector.
With the above factors, SSI expects the Vietnamese market to soon welcome the return of foreign capital in the coming period. The upgraded market will go hand in hand with the positive flow of foreign capital into Vietnamese stocks. According to the most optimistic scenario given by HSBC, FTSE's upgrade could attract a maximum of 10.4 billion USD of foreign capital to the Vietnamese stock market.
