Vietnam benchmark index approaches 1,150-point territory

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), has crossed 1,125 points and could reach the 1,150-point territory soon, according to Saigon-Hanoi Securities (SHS).

After recording gains for four consecutive weeks, the index rose to 1,129.38 points Friday, the highest level since late September 2022.

The nation’s stock market recorded a positive trading week (June 19-23) with most stock groups in the green. The main index only slowed down after approaching the old peak around 1,125 points.

The VN-Index faced correction pressures in the first session of the week, dropping to the territory of 1,100 points. However, the bottom-fishing cash flow appeared as soon as the index reached this area, helping it gain for four consecutive weeks. Friday’s peak marked a 1.27% increase over the previous week.

VNM of Vinamilk, HPG of steel maker Hoa Phat, and VPB of VPBank were the most positive mark influencers. VNM alone contributed nearly 1.2 points to the VN-Index. Chemical and steel groups recovered strongly with an increase of over 5%.

Meanwhile, VCB of Vietcombank, VIC of Vingroup, and GVR of Vietnam Rubber Group had the most negative impact on the benchmark index.

The trading value on the HoSE reached VND82.13 trillion ($3.49 billion), a decrease of 3.9% from the previous week; while the trading volume fell 8.2%.

Liquidity on the Hanoi Stock Exchange (HNX) dropped 4.5% to VND9.81 trillion ($417 million).

Foreign investors, after strong net buying last week, turned net sellers to the tune of VND918.44 billion ($39 million) on the HoSE and VND17.82 billion ($757,490) on the HNX.

According to SHS, with the VN-Index surpassing 1,125 points and continuing its positive trend, it should reach the territory of around 1,150 points in the near future.

In the short term, the market is in a retracement wave. With the VN-Index expected to move closer to the important resistance area of 1,150 points, short-term investors should maintain their current portfolio and only buy stocks during corrections, SHS advised.

In the medium and long term, the market will move in a wide accumulation range to prepare for a new uptrend cycle, it said, advising investors to take advantage of correction sessions to increase their proportion of shares.

“They should choose stocks in leading firms with good fundamentals and stable growth potential that are moving in the current accumulation state,” the report said.

Meanwhile, Vietcombank Securities (VCBS) believes that in the short term, the market is still in an uptrend. However, the VN-Index needs a more convincing ‘follow through day’ (FTD) and break out of the resistance area of around 1,125 points. VCBS recommends that investors increase their share proportion by 20-30% during corrections, focusing on stocks with high demand in the securities, chemicals and construction groups.

Sharing a similar view, Viet Dragon Securities (VDSC) forecasts that with the recent positive developments, the market is likely to cross the 1,130-point resistance zone and head towards 1,150 - 1,160 points. Therefore, investors can expect a short-term rally and hold stocks with good accumulation.

“However, they should consider taking profits from stocks that have increased rapidly recently or are under selling pressure,” it advised.