After the 5th consecutive decline yesterday (September 22), the stock market continued to fluctuate within a narrow range with gloomy trading. There was a time when the VN-Index increased, but as soon as it passed 1,640 points, selling pressure quickly increased, pushing the index down to the reference level of 1,625 points when VHM decreased the floor and VJC lost more than 4%.
VN-Index closed the session on September 23 with a slight increase of 0.81 points at 1,635. However, liquidity matching market orders continued to decline, recording the lowest level since the end of June until now when the trading value on HOSE reached over VND 22,600 billion.
After many strong selling sessions, foreign transactions were more balanced when they only net sold with a value of 7 billion VND in the whole market. FPT is the foreign exchange-traded stock with the strongest selling volume at VND 562 billion. MSN and K Human stocks were also sold for VND82 billion and VND46 billion.
The group of bluechips supporting the index in today's session came from HPG, MWG and banking stocks, although the modest increase was only from 0.5% to 1.7%. The two stocks VJC and VHM ended the session only slightly down, with VJC losing 1.9% and VHM losing nearly 1%.
The factor that needs special attention is the current liquidity situation. If the liquidity shortage in the highlands continues, the VN-Index can enter a stronger correction to attract cash flow. The reason is that large groups of leading stocks such as banks, securities, and real estate all need liquidity to maintain a positive state.
Currently, these groups are weaker than the VN-Index as most have fallen below the 20-day moving average (MA20). If it cannot bounce back in time, this can be considered a warning sign that the general index will soon enter a clearer correction.
In the short term, the VN-Index is likely to continue to fluctuate in the 1,600 - 1,700 point range until more obvious catalysts appear. The upcoming notable milestone is October 7, when the market classification results are announced, along with the process of amending the Land Law, which will be discussed by the Government in October. If these factors develop positively, the VN-Index can escape the accumulation state and establish a new, higher price level, opening up the next uptrend.
In the opposite scenario, if the VN-Index adjusts below 1,600 points, this is not necessarily a negative signal. On the contrary, lower prices may become an opportunity for new cash flow to accumulate, especially when market valuation is still at a reasonable level: P/E depreciates 16.1 times compared to the 5-year average of 16.7 times; P/B depreciates 2.1 times compared to the average of 2.0 times. This shows that there is still room for growth, especially when the market has systematic catalysts.
Regarding foreign capital flows, experts assess that the decrease in USD interest rates helps cool down the exchange rate, while creating a positive spillover effect for the Vietnamese economy and stock market. In addition, the USD entering the interest rate reduction cycle also opens up room for the State Bank to maintain a policy of supporting growth for longer, while prioritizing exchange rate stability and accumulating foreign exchange reserves.
For the stock market, exchange rate stability along with the expectation of a return of foreign capital is expected to strongly improve investor sentiment in the last months of the year. The narrowing VND-USD yield gap further increases Vietnam's attractiveness, especially when accompanied by the story of market upgrading and a new IPO wave.
