Stocks are going through turbulence

Investors remain cautious due to the unclear trend in the stock market. Photo: Le Toan

The stock market closed the week down nearly 10 points due to profit-taking pressure from cheap shares being credited to accounts, pushing the VN-Index to its lowest level in 13 trading sessions, but still within the relatively safe range of 1,260 - 1,265 points.

In the market's stock group, the focus was on Quoc Cuong Gia Lai Company (QCG) shares. Following the news of the temporary detention of General Director Nguyen Thi Nhu Loan, QCG shares were heavily sold off. At closing, QCG fell 6.97% to 9,070 VND/share with a trading volume of 1.6 million units and a remaining sell order of 3.5 million units at the floor price. This was QCG's sixth consecutive day of decline, with a total drop of nearly 26%.

The remaining stock groups in the market all declined. Among them, the banking sector reversed course and fell slightly by less than 0.5%, due to pressure from large-cap stocks. However, the banking sector still maintained its strong momentum.

Despite net buying nearly 500 billion VND worth of SBT shares, strong selling pressure on blue-chip stocks quickly led foreign investors to return to net selling of over 360 billion VND on July 19th.

Looking back at the first three weeks of July 2024, the VN-Index experienced a recovery but stalled when it faced the 1,300-point mark and continuously corrected due to profit-taking pressure in last week's trading session.

Decreased liquidity also reflects the cautious sentiment and lack of confidence among many investors regarding the VN-Index's potential for a breakout, especially given the large amount of money needed to offset selling pressure from foreign investors. Foreign investors sold net more than 52,000 billion VND in the first six months of 2024 and continued selling in early July.

Nevertheless, domestic demand has so far supported prices very well, preventing panic in the face of foreign divestment. Experts believe this is merely a psychological hurdle, hindering the market in the short term, while in the medium term there are many supporting factors to break through to higher levels.

The growth momentum of the stock market at the end of 2024 mainly comes from the strong economic recovery and the projected strong business results of listed companies, with growth of 15-22% compared to 2023. However, the stock market still faces many risks, especially regarding the VND exchange rate and international macroeconomic factors.

According to Dr. Nguyen Duy Phuong, Investment Director of DG Capital, from now until the end of 2024, the expectation of the Fed lowering interest rates in September, thereby easing exchange rate pressure, along with the prospect of continued growth in profits of listed companies, will be the main support for the market.

In addition, the fact that foreign investors have been net sellers for just over six months, and that most non-financial stock groups are currently overvalued, will be major obstacles for the Vietnamese stock market. Therefore, the view is that risk assessment remains mixed, and we do not expect the stock market to be overly positive in the second half of the year. It is more likely to be divergent among industry groups and individual stocks, Dr. Phuong stated.

Source: https://laodong.vn/kinh-doanh/chung-khoan-dang-di-qua-vung-nhieu-dong-1369040.ldo