HÀ NỘI – Healthy market growth during the weekend cannot conceal the fact that local stock markets are likely to remain quiet this week, amid an information-missing month in May and rising tensions throughout the globe.
The benchmark VN Index on the HCM Stock Exchange gained nearly 16 points, or 1.55 per cent, to close Friday at 1,044.85 points. It gained 1.7 per cent last week.
The southern market index also put an end to its previous three-day decline of 3.1 per cent.
The HNX Index on the Hà Nội Stock Exchange advanced 1.50 per cent in the last trading session of the week to finish at 122.77 points, marking it recovery after having fallen 4.4 per cent in the previous three sessions.
Also, the northern market index inched up from the previous week’s end of 122.57 points.
After having tumbled over three consecutive trading days, local stock exchanges were boosted by strong investor purchases, as stocks had fallen to more attractive price levels, especially when the VN Index fell below 1,000 points on Friday.
Alternating increases and decreases in the market were caused mainly by the underperformance of large-cap stocks, as investor confidence remained weak amid a lack of supportive information and rising tensions in the Middle East.
According to BIDV Securities Co (BSC), investors seemed to remain steady as the stock indices were moving, due to high selling from the supply side while foreign investors continued to weigh down the market through their extended net sell value.
“The chances for the VN Index to reach 1,100 points and fall to the 950-970 point range are equal at the moment” due to poor market sentiment, as local stocks were surrounded by negative news, BSC said in its weekly report.
On Wednesday, Iran and Israel attacked each other’s military bases in Syria, sending the two governments to the edge of a comprehensive war that could much worsen the current situation in Syria and spread the conflict to other Middle East countries.
Last week, the US government led by president Donald Trump, announced that they would withdraw from the nuclear agreement with Iran and planned sanctions on the world’s leading oil exporter.
The rising tensions in the Middle East caused an interruption to the world’s crude supply, pushing up oil futures by nearly 3 per cent to a 3 1/2-year high, benefiting local energy firms. Brent crude ended Friday at US$70.70 per barrel.
In Việt Nam, local shares also traded in the negative territory on speculation about firms’ involvement in illegal business activities.
Shares of securities firm VNDirect (VND) were brought down to the daily decreasing band of 7 per cent on Wednesday and Thursday, after its involvement was reported in the recently-revealed gambling case.
Bình Sơn Refining and Petrochemical Co Ltd (BSR) shares sunk between Tuesday and Thursday, after its chairman and chief accountant were arrested for mis-using State capital and assets of the oil refiner.
Sài Gòn-Hà Nội Securities Co (SHS) said that Friday’s recovery might be short-lived and highly risky for bargain-hunters, as trading liquidity continued to slide while investors chose to stand by and were unwilling to take part in the market trading activities.
An average of more than 211 million shares, worth VNĐ5.71 trillion ($254 million), were traded in each session last week. The trading figures were down 12 per cent in volume and 9.5 per cent from the previous week’s numbers.
“If inflow capital does not increase in the coming week, the short-term prospects of the markets are not highly recommended,” SHS said. “Given the current market status, alternating ups and downs may continue with low trading liquidity” and cause the VN Index to struggle between 1,000 and 1,070 points.