How will the stock market perform next week?

DNVN - The sudden increase in selling pressure has caused the VN-Index to fall deeply and rapidly last week. However, the stock market is expected to not be at risk of falling into a new downward cycle.

The domestic stock market has just experienced a week of strong fluctuations. The sudden increase in selling pressure has caused the VN-Index to fall deeply and rapidly.

Although the market had a break this week, in just 4 sessions, the VN-Index lost more than 100 points and became the week with the strongest decline since October 2022. Liquidity increased again and was at a high level of more than 30 thousand VND/session on all 3 floors.

Not only the scores, most of the industry groups also decreased and the price level of stocks also decreased deeply. Red covered the whole area when stocks decreased widely.

Foreign investors increased their transactions, but also increased their net selling value. Although they bought quite a lot in the last session of the week, foreign investors still sold a net of VND1,468 billion for the whole week, a significant increase compared to the previous week (-VND971 billion). Thus, foreign investors continued to increase their net selling since the beginning of the year, when the cumulative value reached VND16,024 billion.

The sudden increase in selling pressure caused the VN-Index to fall deeply and rapidly last week.

Analyzing the cause of this situation, experts said that the domestic stock market last week was affected by many negative information, in which the highlight was international factors. Domestically, in the information about the general meeting of shareholders and business results that seemed to be lackluster, the information about the "very hot" exchange rate had a big impact on the psychology of investors.

Globally, escalating conflict in the Middle East has had a strong impact on markets, while the US economy has yet to show signs of inflation returning to the central bank’s 2% target.

In the stock market, unfavorable information, combined with the cyclical nature of the adjustment after a long period of increase, created great selling pressure. Technically, the VN-Index suddenly decreased with a large amplitude and quickly lost important support levels, causing investor sentiment to quickly turn negative.

The notable point is that liquidity is still quite good. The price level has fallen deeply and quickly, which means that the recovery can also be faster. The proof is that liquidity has increased well with high matching volume. In fact, even in the falling sessions, there is bottom-fishing demand. However, the demand is not strong enough to overwhelm the selling force, but that is quite normal when the market is in a strong correction phase.

Experts predict that the selling pressure on the stock market in the new week may decrease significantly, although the short-term downtrend has not shown any signs of stopping. The exchange rate may ease if the State Bank's sale of USD proves effective.

Many opinions say that the market is under short-term adjustment pressure, but the medium- and long-term upward trend is still maintained.

Mr. Nguyen Khac Thanh - analyst, Saigon - Hanoi Securities Company predicts that VN-Index has returned to the wide accumulation channel of 1,150 points - 1,250 points and lost the momentum to form an upward trend. However, in the medium term, VN-Index is still accumulating and there is no risk of falling into a new downward cycle.

Mr. Thanh believes that next week, the VN-Index is likely to continue to decline. Short-term investors can take advantage of market recovery to reduce their portfolio weight to a safe level.

For medium- and long-term investors, the market is moving back to a wide accumulation channel of 1,150 points - 1,250 points and the accumulation movement may continue for a long time. Therefore, investors should not disburse in the current context but need to patiently wait for a more reliable accumulation phase.

Ha Anh

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