VN-Index breaks through 1,600 point mark, market seeks new balance

VN-Index opened the week at 1,644.56 points and closed at 1,599.1 points after falling 40.55 points. This was the fourth consecutive week of decline, confirming the correction status after breaking through the 1,700 point zone.

The VN-Index officially lost the important psychological support level of 1,600 points. (Photo: Vietnam+)

The Vietnamese stock market has just experienced its fourth consecutive week of decline, ending with the VN-Index officially losing the important psychological support level of 1,600 points.

Accordingly, selling pressure increased sharply at the end of the week in the context of low liquidity, pushing investor sentiment into a state of high caution.

Overwhelming selling pressure

Looking back at the past trading week, Mr. Dinh Viet Bach, analyst at Pinetree Securities Company, said that continuing the downward trend from last week, the market opened the week with a pessimistic sentiment and lost more than 20 points due to the phenomenon of cross margin calls.

However, when VN-Index reached 1,600 points, corresponding to the support zone at the 20-week moving average, bottom-fishing demand returned quite strongly.

“This demand helped the VN-Index increase by more than 50 points in Tuesday's session, with the focus on securities and real estate stocks after a correction period of more than 20%,” said Mr. Bach.

However, the market's excitement did not last long. Since the mid-week session, demand has clearly weakened due to buyers' hesitation, pushing the market into the red with declining liquidity. In particular, selling pressure often appeared in the afternoon trading session of each session. The peak was at the end of the week, when sellers completely dominated and pushed the index down more than 43 points, led by the banking group and Vin stocks.

Summarizing the weekly data, Mr. Phan Tan Nhat, Head of Analysis at Saigon- Hanoi Securities Company (SHS), emphasized that VN-Index opened the week at 1,644.56 points and closed at 1,599.1 points after falling 40.55 points (-2.47%). This is the fourth consecutive week of decline, confirming the correction status after breaking through the 1,700-point zone.

The peak was at the end of the week, the selling side completely dominated and pushed the index down more than 43 points, led by the banking group and Vin stocks. (Photo: Vietnam+)

Cautious cash flow

The VN-Index closing below 1,600 points has changed the technical situation in the short term. According to Mr. Phan Tan Nhat, the VN-Index in the 1,600-1,620 point area has shifted its support role to a near resistance zone. Accordingly, the short-term equilibrium point of the market may have dropped to the area around 1,550 points.

Mr. Nhat proposed a baseline scenario that the index will struggle and accumulate within a narrow range of VN-Index 1,550-1,600 points when cash flow is still weak and investor sentiment is not stable. In addition, the positive scenario is that large cash flow returns to help the index consolidate firmly above the VN-Index 1,600 point mark, a recovery phase to re-test the 1,630-1,660 point zone may open.

However, Mr. Nhat also did not rule out the possibility of a negative scenario. If the VN-Index loses the 1,550-point mark with increased selling liquidity, this is a warning signal of risk and requires investors to reduce their proportion and manage their portfolios closely.

Sharing the view that the market is looking for stability, Mr. Dinh Viet Bach commented that in the short term, the market may continue to adjust to find balance. It is likely that next week, the market will have another strong shake to shake off the volume of "weak goods", thereby activating the cash flow waiting outside.

In addition, Mr. Bach emphasized the differentiation and said that the group of mid-cap stocks showed more positive signs as well as the ability to create a short-term bottom before the general market. On the contrary, if the cash flow remains indifferent, the selling pressure could spread, causing the VN-Index to fall deeper to the 1,500-1,520 point range.

Currently, liquidity is one of the notable factors. Mr. Nhat said that the total trading volume reached approximately the same level as last week but was still at a low level, reflecting a very cautious cash flow.

“Even in the deep decline session at the end of the week, the value of matched transactions reached about 24,592 billion VND, but it mainly appeared when the index had already fallen deeply, showing a high defensive mentality and limited price chasing,” Mr. Nhat analyzed.

In the context of market correction, there is still a bright spot in the long term. According to data from the Vietnam Securities Depository and Clearing Corporation (VSDC) in October, the whole market opened nearly 311 thousand new accounts. In the 10 months, the number of accounts increased by nearly 2.1 million.

Mr. Nhat assessed: “Although stock prices have adjusted, the medium-term demand from new investors is still being accumulated. This is an important supporting factor for the recovery phase when macroeconomic conditions and market psychology improve.”

Faced with unpredictable market developments, experts emphasize the importance of risk management.

According to Vietnam+

Source: https://baohaiphong.vn/vn-index-thung-moc-1-600-diem-thi-truong-di-tim-vung-can-bang-moi-526005.html