Positive signals lift the stock market

The return of banking stocks leading the market’s trend and a surge in liquidity signal significant capital entering the stock market.

The VN-Index reported a positive start to 2024, with six consecutive sessions of gains. The return of banking stocks leading the market’s trend and a surge in liquidity signal significant capital entering the stock market.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,154.68 points, while the HNX-Index was last traded at 232.76 points.

For the week, the former rose 2.19 per cent and the latter was up 0.74 per cent.

On HoSE, the average trading value reached VNĐ17.8 trillion (US$730.3 million), an increase of 15.83 per cent from the previous week. The trading volume on the bourse also increased by 27.03 per cent to 796.95 million shares.

Vietnam Construction Securities JSC (CSI) said that the first trading week of the new year witnessed bullish developments in the Vietnamese stock market, with all four sessions ending higher.

In particular, there was a surprising return of capital to the banking stocks, which are the largest capitalised group in the market, helping the liquidity on the HoSE exchange reach $1 billion on January 4.

According to CSI, with the prospect of further decreases in savings interest rates, liquidity decisively poured into the stock market during the first trading week of the new year.

The securities added that the global stock market had a rather cautious trading week following the December meeting of the US Federal Reserve. The cautious sentiment may have influenced the buying and selling activities of foreign investors in the Vietnamese stock market. Foreign investors net sold nearly VNĐ1.2 trillion.

The developments of the first trading week of 2024 are reinforcing the established upward trend from the end of 2023, said experts from CSI.

It expects the VN-Index to target the resistance level of 1,200 points in the coming weeks but does not rule out the possibility of fluctuations in the range of 1,165-1,175 points.

Meanwhile, Saigon - Hanoi Securities JSC (SHS) noted that although the domestic macroeconomic situation appeared stable, with gradual GDP growth, it had not met expectations. Weak credit growth suggested a low capacity for capital absorption in the economy, and challenges persisted in the real estate and bond markets.

Globally, the economic landscape remained uncertain, with low growth and some EU countries, such as Germany and the Netherlands, experiencing recession. On the positive side, inflation had stabilised, and the Fed had hinted at pausing interest rate hikes and potentially initiating rate cuts in 2024.

Given the mix of positive and negative events, SHS believed it was appropriate for the market to seek balance and accumulate. The macroeconomic conditions call for caution and careful navigation in the coming weeks, the securities firm added.

Việt Dragon Securities Corporation (VDSC) said that the last session of the week reflected a hesitant and exploratory state, with decreased liquidity compared to the previous session.

The market's weakening signals were not clear, but there remained the possibility of significant selling pressure around the 1,160 point-level. It was expected that the market would continue to fluctuate within the 1,145-1,160 points range before more specific signals emerge.

Similarly, Mirae Asset Securities (Vietnam) said that the VN-Index's upward trend was currently holding a significant advantage after rising for six straight sessions.

During the previous week, the index experienced signs of pause around the 1,160 point-level, accompanied by strong profit-taking in the banking sector following a rapid surge.

As a result, there might be some see-saw movements in the upcoming sessions, with investors keeping a close eye on two key levels of 1,150 points and 1,160 points.