Stock market correction expected this week

Stocks are seen entering into a brief correction phase this week as investors may keep a wait-and-see attitude given the lack of supporting news, said securities firms.

Bao Viet Securities Company said in a report that investors had shown signs of caution as the market was more exposed to short-term risks, which could prompt investors to take profit.

The HCMC exchange came under strong selling pressure last week but turnover remained low. Though the VN-Index of the Hochiminh Stock Exchange rebounded on May 18, the main source of strength came from large-caps such as banks and energy firms, which boded ill for the market.

BIDV Securities Company said the stock indexes of the HCMC and Hanoi bourses are showing signs of weakening and becoming more vulnerable.

This week, the VN-Index may test the supporting level of 1,040 points again. It is forecast to either decline or move narrowly given profit taking, it said.

The market is predicted to recover strongly in the third quarter as stock prices will become more affordable after the correction. However, short-term investors may be exposed to risks if there is not enough good news.

The VN-Index was up nearly 1% after the first half hour of trading last Friday but slumped after the lunch break and was down as much as 1.7%. A late rally left the market back into positive territory at the close, rising 0.96% versus the previous session.

Trading value on the HCMC market hit a record VND35 trillion, with put-through transactions of newly-listed property firm VHM accounting for VND30.7 trillion. The index fell 0.4% last week, its fifth losing week in the last six.

According to Viet Capital Securities Company, the market has stabilized somewhat after the recent crash, rising 1.3% in choppy trading over the last two weeks amid high U.S. bond yields, plunging currencies in key emerging countries like Argentina and Turkey and rising oil prices.

Large-cap stocks that pulled back sharply last Thursday led the gain, including dairy firm VNM, brewery stock SAB and consumer goods firm MSN.

“In what must be described as a misleading result, VHM closed flat on its second day of trading. Despite an abundance of buy orders at the ceiling price, there were no sellers so no orders were matched and only the block deals were recorded. Had there been any sellers at the ceiling price, VHM would have added another 7.4 points, or 0.7%, to the index,” the brokerage commented.

« Go Back