'The stock market correction will soon end'

According to experts, because stocks have decreased by a large margin, this adjustment period may be faster than the previous period, "the market will soon increase again".

The stock market has just recorded a deep decline with 158 stocks hitting the floor on HoSE alone, accounting for 30% of the total listed stocks. With a decrease of more than 55 points, the session on August 18 recorded the sharpest decline in over a year.

Regarding the reasons for the market decline, Mr. Nguyen The Minh, Director of Analysis at Yuanta Securities Company, said that there were many factors that caused investors to sell off in droves. From the sharp decline in US stocks at the beginning of the week, the collapse of Chinese real estate giant Evergrande, to the psychology of protecting the results of a previous period of strong growth.

"The early decline in the August 18 session was like the last straw for investor sentiment, triggering a widespread sell-off," Mr. Minh commented.

This view is also similar to the assessment of Mr. Dinh Quang Hinh, Head of Macro and Market Strategy Department, VNDirect Securities Company (VND).

According to him, the market's correction was predicted in advance, but the surprising thing was the rapid and strong decline in just one session last weekend. Fortunately, the market had two weekend sessions on Saturday and Sunday for investors to regain their composure and consider. The reduction of margin ratio by a securities company in the top market share group usually only has a short-term impact within 1-2 sessions. The exchange rate issue is also showing signs of cooling down when it turned to decrease sharply in the sessions on Thursday and Friday. Meanwhile, the "Vin" group of stocks may soon regain balance.

"We expect the market to experience a technical recovery next week and investors to stop selling off," Mr. Hinh commented.

Sharing the same view, Mr. Huynh Hoang Phuong - Director of Investment Research and Analysis at FIDT pointed out four main reasons for the sharp decline in the market at the end of the week. Firstly, August is a time when there is no information to support the market to continue its upward momentum. Secondly, the general valuation of the market is not too cheap, so it is no longer attractive, making it difficult to attract more cash flow as before. Thirdly, large stocks have all gone through the previous "wave", making it difficult to move up to a higher price peak. Fourthly, recently, securities companies have made projections for the second half of the year, most of them have maintained a positive view but not as optimistic as the forecasts made at the beginning of the second quarter.

Finally, he believes that this correction also has psychological factors involved. In recent days, the market has been talking about a scenario of tightening margins in the second half of the year. This creates a much more cautious mentality for investors.

"Most investors are profitable so they need to close. Combined with the information about tightening margins and today's fluctuations, they have to sell because their current endurance is no longer high after the downtrend (price decline) from the second quarter of last year," he further analyzed.

Assessing the upcoming developments, Mr. Huynh Hoang Phuong said that the trading session on August 18th decreased sharply, so the market will adjust faster than the previous consecutive declines. He expected the market to start recovering from next week.

Chung commented that, according to Mr. Nguyen The Minh, the market may continue to decrease early next week, but this correction will soon end because the decrease amplitude is large enough.

Since the beginning of the year, the market has undergone a slow correction from February to April. The VN-Index has been steadily decreasing within a narrow range, so the correction period has been prolonged. However, the August 18 session, which was also a correction period, had a much stronger amplitude. A series of stocks decreased to the limit, while the index recorded a decrease of more than 4%.

"It is very difficult to determine how much the market will decrease, but I expect the two zones of 1,160 points and 1,125 points. These two support levels mean that the VN-Index can decrease for 1-2 more sessions before finding a balance point," Mr. Minh commented.

The market was flooded with red on the afternoon of August 18. Photo: Tat Dat — The market was flooded with red on the afternoon of August 18. Photo: *Tat Dat*

Another reason why this expert expects the market to return is that many investors "missed the boat" in the recent uptrend, so the psychology of waiting to catch the bottom is very high.

Stocks have been rising steadily since late April without any real correction. During the entire three-month rally, the VN-Index only fell for 1-2 sessions before returning to green and extending its upward momentum. "Many investors have been waiting for the market to correct for more than three months but have not found an opportunity to enter. So not everyone is sad after the August 18 session," said Yuanta's analysis director.

However, in a post-session report, BIDV Securities Company (BSC) said that the sharp decline in VN-Index with a sudden increase in liquidity will pose risks in the coming trading sessions. The current support level of the market is 1,145 points. This unit recommends that investors should be cautious in the following trading sessions.

The analysis team of Vietcombank Securities (VCBS) advises investors to limit "buying" stocks that have increased rapidly and should wait to buy these stocks during sharp corrections during the session.

Along with that, investors can proactively maintain purchasing power to be ready to disburse if the market shows signs of reversal, but also need to strictly adhere to investment discipline when stock price movements are contrary to expectations or touch stop-loss thresholds or take-profit zones.

Minh Son - Tat Dat

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