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Experts: Further correction likely this week
Phuong Thao
Monday,  Jul 17, 2017,19:42 (GMT+7)

Experts: Further correction likely this week

Phuong Thao

HCMC – The local stock market saw liquidity tumbling due to investor caution last week, so the correction phase is likely to extend further when the VN-Index is approaching new resistance levels.

Phan Dung Khanh, head of investment advisory at Maybank Kim Eng Securities Company, mentioned factors possibly causing impact on the market such as low turnover, the previous peak at 780 points and the psychological threshold at 800 points. Foreigners were net buyers in terms of value last week but their transaction reduced and the investors reported three sessions of net selling in terms of volume.

Besides, the Government’s determination to boost economic growth and financial reports of listed enterprises in the second quarter and the first half will also impact the market, Khanh said in an interview with Dau Tu Chung Khoan website.

In fact, the stock market is the most outstanding among investment channels this year, while the greenback has strongly depreciated against some other currencies while oil price has bounced back.

This week, the local market is expected to correct further as cash flow has reduced and some market drivers have lost steam. However, this is a short-term technical correction and the uptrend since early this year remains intact, Khanh commented.

Chau Thien Truc Quynh, brokerage director of Viet Capital Securities Company, said that the VN-Index still maintains positive outlook while the VN30 Index and HNX-Index are expected to see flat movements.

The two exchanges saw trading volume improving last Friday but it was still lower than the average level of previous sessions, indicating both buyers and sellers were cautious and decided to stay on the sidelines. In this context, the VN-Index may be driven by some large caps.

The main index is predicted to rebound early this week before rising slightly given poor turnover. There will be differentiation among stocks following the announcement of second-quarter business results, and the VN-Index still has chances to approach the medium-term resistance at 790 points, Quynh said.

Hoang Thach Lan from Viet Dragon Securities Company said the unexpected slump on July 7 and July 10 has resulted in cautious sentiment, especially during afternoon trading.

From a technical perspective, many large caps are facing selling pressure as investors are awaiting their earnings results in the second quarter. The enterprises will influence movements of stock indexes.

Foreign trading was also notable last week. The investors remained net buyers in general but they strongly offloaded some large caps, sending the stocks and the VN-Index down. Therefore, investors should notice stocks heavily sold by foreign investors in recent time, the expert said.

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