The stock markets in HCMC and Hanoi dropped back sharply as investors started to take profits on Thursday although their combined turnover remained high, at around VND2 trillion.
Trading on the Hochiminh Stock Exchange started with optimism carried over from Wednesday as the VN-Index gained in early trade. However, those moments were short-lived, and profit taking pressure quickly led the show and pushed the index into the red in the continuous matching session.
Some quick rebounds were seen during the day, concentrated on the foreign favorites such as HAG, VCB and MBB but all were faint. The VN-Index ended up losing 8.49 points, or 1.82%, to close at 456.76 as gains of pennies could not compensate for the losses of the heavyweights.
The Hanoi market opened a little stronger and then dipped into the red and finally failed to bounce back despite some mild rises during the day. At the closing bell, the HNX-Index lost 0.38 point, or 0.61%, to end at 62.33.
Viet Capital Securities Co. noted the 0.3 point contribution of VCG as it closed at limit up, albeit very impressive, was not enough to save the northern index from a losing session.
HCMC Securities Corp. (HSC) said the market’s correction on Thursday was a fairly broad based but orderly retreat as the decline gathered pace in the afternoon.
“Few stocks fell to the floor prices in line with our idea of a fairly shallow correction. Even so as we mentioned in our most recent strategy piece, the 470-point level on the VN-Index represents a strong resistance and we have now pushed up against it twice and been rebuffed. The second rebuff on Thursday seems likely to unleash more profit taking in short term,” it said.
HSC also said that foreign buying has dropped off in recent days, removing a key support that had previously pushed up the market day by day regardless of what the technical factors were showing.
“This strikes us as a long awaited and healthy correction in what is still a primary market-up trend. High-beta issues may fall as much as 10-15% before finding support. Indeed, a correction near term would set up the market for a second up-leg beginning perhaps before Tet. Margin positions remain light compared to previous rallies while recent foreign buying while active still amounts to a fairly small number in the scheme of things,” the broker added.
The Saigon Times Daily