Pillar stocks to sustain VN-Index's upward trend

Unlike the previous week, large-cap stocks played a role in supporting the market during the adjustment sessions. The selling pressure mainly came from mid-cap stocks.

The market showed a tug-of-war trend with a decline in the third week of July.

After two relatively calm trading sessions at the beginning of the week, selling pressure increased on Tuesday and the final trading session.

Most experts believe that the 1,250-point mark will serve as strong support, and the index is unlikely to fall significantly below this threshold. Therefore, investors may consider returning to some promising stocks for the second half of the year.

Unlike the previous week, large-cap stocks played a role in supporting the market during the adjustment sessions. The selling pressure mainly came from mid-cap stocks.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed the week at 1,280.75 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 245.02 points.

Both indices recorded weekly declines, with the former decreasing by 1.25 per cent and the latter by 1.84 per cent.

Although the market declined, liquidity improved for the second consecutive week. The average trading volume on HoSE reached VNĐ19.48 trillion (US$769.34 million), a 0.27 per cent increase from the previous week.

Foreign investors continued to net sell, but the selling pressure eased slightly, and there were signs of bottom-fishing in two trading sessions.

Đinh Quang Hinh, Head of Macroeconomics and Market Strategy at VNDIRECT Securities, said: “Although it was a week of decline, the market still had many bright spots.

"Firstly, the foreign net selling trend showed signs of cooling down as the Fed signalled a clearer possibility of cutting interest rates, and there was some bottom-fishing by foreign investors in the middle of the week."

Market liquidity also improved as investors actively disbursed during deep intraday adjustments. The cash flow did not withdraw but rather shifted among different sectors. In particular, pillar stocks in the banking sector attracted cash flow again in the context of 'credit starting to flow' and positive business results of some commercial banks gradually being revealed.

These are the bases for expecting that the market will not see a deep correction, and the 1,250-point area will act as strong support for the VN-Index. However, on the flip side, the market is also lacking strong enough drivers and supportive information to form a short-term uptrend.

“Investors should consider exiting stocks that have risen sharply recently and are no longer 'cheap' to switch to sectors and stocks that still have attractive valuations and improving business prospects, such as the financial-banking sector and some export enterprises,” Hinh added.

According to experts from Viet Dragon Securities (VDSC), the market was cautious as it approached the 1,280-point resistance area and retreated. Liquidity increased compared to the previous session, indicating that supply pressure is still weighing on the market. However, the market is still being supported at the 1,260-point area. It is expected that the market will continue to fluctuate around this area to test supply and demand at the beginning of the new trading week.

However, it is still necessary to pay attention to the cautious and risky state of the market due to recent instability. Therefore, investors should slow down and observe supply and demand dynamics to reassess the market state. Additionally, they should consider taking profits or restructuring portfolios during market recoveries to minimise risks.

Experts from SHS Securities believe that if the VN-Index continues to adjust and the proportion is below the average, consider disbursing when the VN-Index is around the 1,250-point area. The target is leading stocks with good Q2 business results and positive prospects for the end of the year.