After ending the third quarter surpassing the highest price range of 2024 around 1,250 points, VN-Index entered the first session of the fourth quarter positively. However, as soon as it approached the strong resistance level of 1,300 points, the VN-Index "gave up" and continued to be unable to "break" this barrier due to increasing selling pressure.
Contrary to the selling pressure of domestic investors that made the market have a not very positive first sessions of October, foreign investors still net bought nearly 450 billion VND on the HOSE floor with the focus on disbursing TCB shares.
Looking ahead to October and the remaining months of 2024, analysts at Mirae Asset Vietnam Securities Company believe that the divergence between industry groups and the condensation of cash flows in banking stocks have partly reflected a broad weakening signal in the market in the context of growth stories gradually becoming less convincing to investors.
In addition, the lack of cash flow in the remaining sectors will cause the market to lack the necessary buffer if profit-taking pressure returns to the banking group. In particular, when the capitalization ratio of some sectors with potential price increases such as raw materials, financial services or retail is insignificant compared to the capitalization ratio of the banking group. Thereby, it will create a feedback loop effect that causes selling pressure to gradually spread back to these groups.
Aside from the market stories, there are three factors investors need to watch in October.
First, FTSE's market upgrade decision and assessment. At the end of the September 2024 rating assessment period, FTSE Russell will make an official announcement after the US stock market closes on October 8.
Second, Q3 business results. The analysis team of total profit after tax and minority shareholder interests of enterprises listed on the HOSE will record a breakthrough growth in Q3/2024, led by industry groups such as banking and retail.
Third, the 8th session of the 15th National Assembly is scheduled to open on October 21, 2024. The analysis team pays special attention to a number of draft laws expected to be passed or draft laws that will receive comments, such as: Law on Public Investment; Law on Value Added Tax (amended); Law on Corporate Income Tax (amended); Law on Data; Law on Management and Investment of State Capital in Enterprises.
From those analyses, in the short term, Mirae Asset experts expect that VN-Index will find support at 1,280 points and continue to move towards the psychological resistance zone of 1,300 points.
However, fluctuations may appear, profit-taking psychology will increase when VN-Index surpasses the psychological resistance zone and this trend may last until VN-Index successfully conquers the 1,330 point mark combined with the green color that needs to spread to many industry groups.
Mr. Nguyen The Minh - Director of Research and Development of individual customer products at Yuanta Securities Company also commented that in October, the market still faced strong resistance at the 1,300 point threshold.
However, in the medium term, the market is still in an uptrend. Monetary easing policies will have an impact on the market in the short term, helping to stimulate investor excitement. Global monetary easing will help cool down the exchange rate factor. Accordingly, money will flow into emerging and frontier market groups.
However, Mr. Nguyen The Minh also said that in the long term, it is necessary to consider the impact of easing policies. If monetary easing is implemented but the economy does not recover, it can easily lead to a potential recession.
