Investors need patience amid high market volatility: brokers

The VND/USD exchange rate is continuing to climb, and amid high market volatility, stock investors need to patiently observe market developments and wait for a short-term balance zone, according to Vietnamese brokers.

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), dropped from the offset of Friday's session, and stood below the reference mark throughout the trading day.

In the afternoon, increased demand drove the benchmark index to slightly more positive signs, but the overwhelming supply pulled the VN-Index down sharply.

Closing the Friday session, the VN-Index plunged 13.14 points, or 1.04%, to 1,255.11, while the HNX on the Hanoi Stock Exchange dropped 2.76 points, or 1.14%, to 239.68. There were 544 losers and 311 gainers on the two bourses.

It was the third consecutive losing session for the VN-Index, which fell 2.3% against the end of the previous week.

Experts attributed the main index’s corrections to pressure from world stock markets, with Dow Jones declining 1.35%, S&P 500 1.23%, and Nasdaq 1.4%.

In addition, the VND/USD exchange rate has surpassed its historical peak of VND25,000 despite the State Bank of Vietnam's efforts to net withdraw more than VND170 trillion ($6.8 billion) since March 11 through open market operations (OMO). This development has had a significant impact on investor sentiment.

Strong net selling by foreign investors continued to negatively impact the market with VND15.68 trillion ($628 million) offloaded, marking their seventh consecutive week of net selling.

Vu Minh Duc, deputy director of VietCap Securities, said in a report that the VN-Index is forecast to continue falling in the coming sessions to test the support territory of around 1,235 points.

"Buying power is likely to increase if the VN-Index drops to this area, creating a possible technical recovery. The current resistance zone is around 1,265 points," he assessed.

According to Dinh Quang Hinh, an analyst from broker VNDirect Securities, the VN-Index is in a short-term downward inertia and could fall to 1,230 points.

"However, investors should not rush to bottom-fish stocks in the context that the exchange rate shows no signs of cooling down and market volatility is high,” he advised.

Investors need to patiently observe market demand in the support area of around 1,230 points and wait for it to establish a short-term balance zone before putting their money down, he recommended.

For investors with high leverage ratios, discipline is necessary, and they should consider lower leverage in recovery sessions to control portfolio risks, Hinh said.