Stock market perspective week 14-18/10: VN-Index may continue to fluctuate within a narrow range at 1,260-1,300 points
Investors should maintain a reasonable proportion of stocks in their portfolio and may consider reducing the proportion of stocks when the VN-Index approaches the upper limit of around 1,300 points.
Do not rush to open trading positions at early market uptrends.
VN-Index ended the week at 1,288.39 points (+17.79 points, or +1.40%). HNX-Index ended the week at 231.37 points (-1.30 points, or -0.56%).
Liquidity on both exchanges this week decreased compared to the previous trading week when the matched volume was -26.23% at HoSE and -28.05% at HNX. Foreign investors continued to net sell more than 660 billion VND.
A more positive point in the foreign trading picture is that there have been initial signs of a reversal, specifically selling pressure has decreased significantly in September and some sessions in October have focused on net buying of pillar stocks.
According to Agrisesco Research, some markets in the Asian region such as Indonesia or India are witnessing a reversal of net buying by foreign capital flows. In the context that the US Federal Reserve (Fed) has lowered its operating interest rate by 0.5% and may continue to reduce it in late 2024, China has economic stimulus packages, supporting the stock market, capital flows are likely to return to emerging and frontier markets. This, along with the Vietnamese economy showing positive signals, is expected to be the driving force for foreign capital flows to return in the near future.
With the market forecast to fluctuate in the short term as it approaches the 1,300-point resistance zone in the coming trading week, investors should not rush to open trading positions at early market uptrends. However, the fact that the VN-Index remains positive above the 20-day MA support line shows that the uptrend is still being preserved, and investors can continue to hold stocks with appropriate proportions.
Agrisesco Research believes that in the scenario where VN-Index returns to deeper support levels (1,265 point area) to re-test the demand pole, active investors can consider opening short-term trading positions for stocks that have attracted cash flow recently such as banks, securities, steel or groups of stocks that are forecast to have positive profit growth compared to the same period such as retail, livestock, maritime transport, etc.
Stock market in the second half of October: Waiting for a boost from the corporate profit picture
The market is looking ahead to the second half of October with many important events. Specifically, the third quarter earnings season is about to begin, which will partly answer investors’ recent concerns about the impact of Typhoon Yagi on corporate production and business.
VNDIRECT Securities Company experts expect the overall market profit picture in the third quarter to remain positive, driven by the economic growth momentum in the last quarter and the low base level of the same period last year. If the market profit picture is as positive as expected, it will be a strong boost to investors' morale and the stock market trend in the period from now until the end of 2024 .
In addition to the story of business results, the market also paid attention to new developments in the US economy as well as the policy meeting of the Federal Open Market Committee (FOMC) in early November 2024.
Currently, the market still believes that the Fed will continue to cut the operating interest rate by 0.25 percentage points at the upcoming meeting. Moreover, the US presidential election in November will also have certain impacts on the global financial market.
In the context that investors are waiting and watching for important developments, the market's slow and cautious trading may continue next week, according to VNDIRECT. It is likely that the VN-Index may continue to fluctuate within a narrow range of 1,260-1,300 points. Therefore, investors should maintain a reasonable proportion of stocks in their portfolios, and may consider reducing the proportion of stocks when the VN-Index approaches the upper limit of around 1,300 points.
On the contrary, investors can buy and increase the proportion of stocks if the index falls back to support around 1,260 points, prioritizing industry groups with improved business prospects in the last two quarters of the year, including banking, residential real estate and import-export groups (textiles, seafood, wooden furniture).
Regarding the stock sector, Agrisesco Research believes that the opportunity to find high-profit growth groups will gradually become scarcer, and the factor of low business results in the same period will no longer be the main story. However, it still maintains the assessment that some sectors can grow positively in the context of the economy still sending out positive signals.
Some industry groups with high profit growth potential in the third quarter of 2024 and the first 9 months of 2024 include: fertilizer, retail, livestock, banking and logistics.
Fertilizer and retail are the two industries with extraordinary profit growth in the third quarter thanks to the low base factor of the same period last year. Meanwhile, the livestock industry has favorable factors such as low input prices of animal feed materials, while the output price of pigs has increased sharply since the beginning of the year, supporting profit margins.
For the banking industry, this is the group that has been attracting very good market cash flow in the recent period and is also the industry group that is expected to maintain a high double-digit profit growth rate in the third quarter of 2024 thanks to strong credit in the context of economic recovery.
Source: https://baodautu.vn/goc-nhin-ttck-tuan-14-1810-vn-index-co-the-tiep-tuc-vao-dong-trong-bien-do-hep-tai-1260-1300-diem-d227348.html
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