Interest rates fall, why are stocks still being "dumped"?

Interest rates decrease, VN-Index still "red floor"

The June 16 stock market session witnessed quite surprising information. That is, the operating interest rate was adjusted down by the State Bank for the fourth consecutive time since mid-March 2023. It is said to be surprising because previously, experts all predicted that the next interest rate reduction would not be implemented until July.

In theory, lower interest rates would be good for economic activity, thereby boosting the stock market. However, the stock market session on June 16th fell to the floor.

At the close of the stock market session on June 16, VN-Index fell 1.75 points, equivalent to 0.16% to 115.22 points. VN-Index would have fallen even deeper if it had not received support from blue-chips. Despite facing strong selling activity, VN30-Index still maintained its green color. At the end of the week, VN30-Index increased 0.49 points, equivalent to 0.04% to 1,109.06 points.

The June 16 stock market session recorded the advantage for the group of decliners. The entire Ho Chi Minh City Stock Exchange had 258 stocks decreasing, 54 stocks remaining unchanged and only 170 stocks increasing. The VN30 group had 20 stocks decreasing, 2 stocks remaining unchanged and 8 stocks increasing.

The stock market session on June 16 received good news that the operating interest rate has decreased for the fourth consecutive time. However, the stock "dumping" activity still took place, causing the VN-Index to sink into the red. Illustrative photo

Blue-chip banking stocks were the driving force of the stock market session on June 16. Of the 8 rare gainers in the VN30, 4 were in the banking sector.

Closing the stock market session on June 16, VCB increased by VND 1,500/share, equivalent to 1.4% to VND 105,000/share; STB increased by VND 1,200/share, equivalent to 4.3% to VND 29,000/share; ACB increased by VND 100/share, equivalent to 0.5% to VND 21,800/share; TPB increased by VND 50/share, equivalent to 0.3% to VND 18,200/share.

On the contrary, after many hot increasing sessions, today, real estate stocks played a role in pulling the market back when many large-cap stocks in this industry simultaneously fell sharply.

PDR decreased by 450 VND/share, equivalent to 2.6% to 16,850 VND/share; NVL decreased by 250 VND/share, equivalent to 2.3% to 14,900 VND/share; VRE decreased by 350 VND/share, equivalent to 1.3% to 26,500 VND/share,...

On the Hanoi Stock Exchange, red was even more widespread. At the close of the stock market session on June 16, the HNX-Index fell 1.09 points, or 0.47%, to 228.44 points; the HNX30-Index fell 4.19 points, or 0.97%, to 427.32 points.

Stocks are still being dumped

Along with the simultaneous decline of the indices, the liquidity of the stock market session on June 16 suddenly skyrocketed, reaching the second highest level in 2023.

On the Ho Chi Minh City Stock Exchange, nearly 1.2 billion shares, equivalent to VND22,425 billion, were successfully transferred. The Hanoi Stock Exchange recorded 153 million shares, equivalent to VND2,457 billion, transferred. Thus, the transaction value on the entire stock exchange on June 16 once again exceeded the billion-dollar mark.

It can be seen that despite the good news that the operating interest rate has decreased for the fourth consecutive time since mid-March 2023, the selling activity still took place with soaring liquidity, causing the VN-Index to sink into the red. In fact, this was something that securities companies had predicted.

After the June 15 stock market session closed, Yuanta Securities Company assessed that the market may continue to be under adjustment pressure in the May 16 session and liquidity may increase sharply again due to ETF funds restructuring their portfolios.

At the same time, according to Yunta, the market is still in a short-term adjustment phase and short-term risks remain high, especially the short-term sentiment indicator continues to decrease, showing that investors are still cautious about current market developments.

Forecasting for the stock market session on June 16, Agriseco Securities Company believes that the market will continue to move sideways and differentiate. It should be noted that June 16 is the restructuring deadline for ETF funds, so it may affect the index's performance during the session. The analysis team recommends that investors do not participate in new disbursements and increase the cash position in the portfolio.

It can be seen that securities companies have predicted the impact of funds restructuring their portfolios on the VN-Index.

Source: https://www.congluan.vn/chung-khoan-16-6-lai-suat-giam-vi-sao-co-phieu-van-bi-xa-post251893.html