The domestic stock market experienced a positive trading week, with the VN-Index registering an impressive increase and nearing a strong resistance zone.

 

On the Hochiminh Stock Exchange (HoSE), the index closed the week at 1,741.32 points. For the week, it surged by 50.33 points, or 2.98 per cent.

 

However, this upward momentum was primarily driven by a handful of large-cap stocks.

 

Overall liquidity remained relatively stable compared to three weeks earlier but fell nearly 41 per cent below the 20-week average.

 

The average trading volume on the HoSE was 741 million shares per session, translating to a value of nearly VNĐ23.8 trillion (US$901.2 million) per session.

 

On the Hanoi Stock Exchange (HNX), the HNX-Index ended the week at 260.65 points, up 0.74 points, or 0.28 per cent, from the previous week.

 

Liquidity on the northern bourse also showed signs of weakness, with total weekly trading value at VNĐ6.6 trillion, averaging close to VNĐ1.33 trillion per session.

 

The decline in market liquidity was largely due to dwindling selling pressure after numerous stocks had seen significant losses.

 

An important factor contributing to this low liquidity is the limited inflow of new capital into the market.

 

High credit growth has left little room for additional lending and several banks have recently raised their mobilisation interest rates, leading to a liquidity shortage that has affected capital flows into equities.

 

Overnight interbank rates surged to a high of 7.48 per cent per year on December 3.

 

To address this issue, the State Bank of Vietnam (SBV) has implemented a series of intervention measures, including an increase in the lending interest rate for collateralised securities (OMO - open market operations) from 4 per cent to 4.5 per cent per year, effective from December 4.

 

Positive macroeconomic signals for December continue to support the market, particularly with favourable news regarding the US Federal Reserve's interest rate reductions.

 

If capital flows return, there is a strong possibility that the market can establish new peaks, with investors hoping to sustain levels between 1,720 and 1,760 points.

 

In a surprising turn, foreign investors returned to net buying this week after a prolonged period of selling.

 

During the middle of the week, strong buying was observed before a return to net sales at the week's end. Overall, foreign investors recorded net purchases of VNĐ4.49 trillion across the market.

 

From a technical perspective, analysts at Vietcombank Securities (VCBS) noted that the VN-Index closed the week with a Spinning Top candlestick pattern, indicating significant indecision and struggle as the index approached resistance. The daily chart showed fluctuations as the index neared the 1,760–1,770 point resistance zone.

 

Currently, other indicators have not signalled a definitive peak, suggesting that upward momentum remains intact, accompanied by normal supply and demand testing.

 

VCBS also emphasised that while the money flow indicator has decreased in level, it remains above zero, indicating active buying pressure in the market, which supports the VN-Index's upward trajectory.

 

Consequently, VCBS predicts that the VN-Index will fluctuate within the range of 1,730 to 1,750 points as it seeks a short-term equilibrium.

 

Although the VN-Index successfully found a bottom at 1,580 points on November 10, analyst Nguyễn Tấn Phong from Pinetree Securities believes the market will not break out before year-end, citing the need for further accumulation due to unresolved macro-economic issues.

 

Phong highlighted that the VN-Index is significantly influenced by Vin stocks, advising investors to focus less on broad index numbers and more on their individual portfolios and the performance of specific stocks they hold. — BIZHUB/VNS