The stock market will end the third quarter of 2024 in the next trading session (September 30) to enter the last quarter of the year.
This is also the period when the market receives the business results of enterprises. In fact, after more than 3 months of trading, VN-Index touched the 1,300 point threshold again in the last trading session of last week (September 27). Analysts said that the last trading week can be considered a "run-up step" when VN-Index retests the old peak. However, the index is facing a strong resistance zone, so profit-taking pressure is likely to increase in the coming sessions.
Liquidity soars
Experts from Vietnam Construction Securities Joint Stock Company (CSI) commented that the past trading week (from September 23 to 27) could be considered a "run-up step" when the index retested the old peak. Although VN-Index could not successfully break through the 1,300-point mark, it still left many positive marks. First is the return of liquidity. In fact, the matched liquidity last week exploded and far exceeded the average of 20 trading sessions in the last 3 sessions of the week.
Next, the role of the banking group was clearly demonstrated last week when it made a strong breakthrough in points and accounted for 40% of the total trading volume of the market. Unfortunately, profit-taking pressure tended to increase in the last 2 sessions of the week, making it impossible for the market to surpass the peak.
Divergence began to occur when profit-taking pressure spread across several industry groups. Closing the trading week of September 23-27, the VN-Index was at 1,290.92 points, up 18.88 points compared to the previous weekend.
After nearly 3 months, market liquidity had an explosive week, exceeding 9.3% compared to the average of 20 trading weeks. Accumulated to the end of the trading week, the average matched liquidity on the HOSE floor reached 802 million shares (up 21.66% compared to the previous week), equivalent to 19,365 billion VND (up 18.74%) in trading value.
Last week, the market had 3 strong increasing sessions, the market opening recorded overwhelming green with 13/21 industry groups increasing points. Contributing greatly to the market's growth were large-cap industry groups with high spillover such as: Securities (up 3.47%), banking (up 3.3%), seafood (up 2.55%)...
On the contrary, adjustment pressure still casts a shadow on the following industry groups: Consumer goods (down 2.21%), aviation (down 2.02%), telecommunications technology (down 1.64%), pharmaceuticals (down 1.02%)...
Foreign investors net sold 498 billion VND on all 3 exchanges last week. The focus of net selling last week was some stocks such as VIB, VPB, HPG...
CSI observed that selling pressure once again increased sharply at the psychological level of 1,300 points, making it impossible for VN-Index to conquer the old peak. At the end of the week, the market reversed and decreased slightly with high liquidity (order matching volume on HOSE increased by 50.13% compared to the average of 20 sessions). Although liquidity was high in the last session of the week, the decrease was not large enough to change the upward trend that had formed in the previous 3 sessions.
CSI believes that the uptrend is still completely dominant, but there is a high possibility that there will be a correction after the VN-Index failed to conquer the psychological mark of 1,300 points twice last week.
The correction is likely to bring VN-Index to the support zone of 1,280 points. However, experts from CSI still expect VN-Index to surpass the psychological mark of 1,300 points and move towards the resistance level of 1,320 - 1,330 points in the coming weeks.
Mr. Pham Binh Phuong, an expert from Mirae Asset Securities Joint Stock Company (Vietnam), said that in the last two sessions of the week, the VN-Index relied heavily on the performance of banking stocks to increase points. Perhaps this factor also made investors worried and chose to sell when the index just reached the psychological threshold of 1,300 points.
Observing the volume in the last 3 sessions of the week, Mr. Pham Binh Phuong is more concerned than positive about the high liquidity factor. The appearance of a short-term correction to create a new price base before continuing the uptrend will help the uptrend to be more sustainable than continuing the uptrend on a high liquidity base of more than 20,000 billion VND per session.
According to analyst Nguyen Huy Phuong from Dragon Viet Securities Joint Stock Company (VDSC), the market continued to make efforts to overcome the psychological resistance zone of 1,300 points last weekend, but was unsuccessful and had to "step back". Liquidity decreased compared to the previous session but remained high, showing that supply is still maintaining great pressure as the market approaches the resistance zone.
With the current signal, it is likely that the market's performance will temporarily slow down and there may be an adjustment in the next trading session to retest the support cash flow at the 1,285 point area.
In fact, the Vietnamese stock market increased in the context of much favorable domestic and international information.
According to experts from Saigon - Hanoi Securities Joint Stock Company (SHS), last week, the market received a lot of positive macro information such as General Secretary - President To Lam's discussion with leading US enterprises; the State Bank of Vietnam sharply increased the scale of bidding on the OMO lending channel, supporting the liquidity of the banking system, thereby establishing a lower interbank interest rate level in the coming time; the People's Bank of China (PBoC) will cut the reserve requirement ratio by 0.5 percentage points, lowering the policy interest rate and the market benchmark interest rate. This move will inject about 1,000 billion yuan (141.7 billion USD) of long-term liquidity into the financial market.
Besides, the world stock market has recently been very positive, which helps domestic investors feel confident and bold in buying stocks.
US stocks rise for third straight week
At the close of the session on September 27, the Dow Jones index hit a record high, as US inflation data increased the possibility that the US Federal Reserve (Fed) would aggressively cut interest rates at its meeting in November.
The Dow Jones index rose 0.33% to 42,313 points, while the S&P 500 index fell 7.013% to 5,738.17 points and the Nasdaq Composite index fell 0.39% to 18,119.59 points.
However, on a weekly basis, all three major US stock indexes rose for the third consecutive week.
The US personal consumption expenditures (PCE) price index in August 2024 increased only 0.1% compared to July 2024, in line with the forecast of economists participating in the Reuters survey.
Compared to the same period last year, the index increased 2.2% in August 2024. In addition, consumer spending, which accounts for more than two-thirds of US economic activity, increased 0.2% last month. This increase was lower than the estimated 0.3%, but showed that the economy maintained momentum in the third quarter of 2024.
Markets are pricing in a 25 basis point rate cut at the Fed's November meeting, with the probability of a 50 basis point cut now rising to 56.7% after the inflation data.
The Fed kicked off its latest monetary policy easing cycle on September 18 with a 50 basis point interest rate cut.
US stock indexes have been rising for most of the past week. The S&P 500 closed at a record high on September 26 after chipmaker Micron Technology gave an upbeat earnings forecast. US stocks continued their rally on September 24, hitting a new high as investors cheered China’s new economic stimulus package.
The S&P 500 is up 1.6% since the start of September 2024. Meanwhile, with just one trading day left in September, the S&P 500 is on track for its first September gain since 2019, according to FactSet data.
Mr. Sam Stovall, chief investment strategist at CFRA Research in New York, said that investors are still cautious, waiting to see whether a "soft landing" is the most likely outcome for the US economy.
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