At the end of the week’s trading session on March 8, the stock market experienced a sharp decline as the VN-Index closed at 1,247.35 points, down 21.11 points; HNX decreased by 1.05 points to 236.32 points, while Upcom decreased by 0.38 points to 91.23 points.
Notably, there was a significant increase in liquidity, with the trading value on the HOSE exchange reaching VND 32.5 trillion, a substantial increase compared to previous sessions. A series of leading stocks negatively impacted the market, including BID, CTG, TCB, VNM, MBB, HPG, and more.
Many investors expressed concerns that the market would enter a correction phase after several months of continuous growth. In fact, the VN-Index has surged from around 1,020 points at the beginning of November last year to its current level, increasing by approximately 250 points.
Several brokerage firms believe that the significant market decline is due to profit-taking pressure from investors after weeks of consecutive gains. Mr. Phan Dung Khanh, Director of Investment Advisory at Maybank Securities, stated that the strong recent increase in the VN-Index and the current correction are not entirely surprising. The market has increased by about 250 points, and many stocks have experienced significant price increases. Therefore, when the market declines, profit-taking actions occur, combined with the VN-Index approaching the resistance level of 1,280 points and the typical market decline effect on Friday sessions. However, today’s liquidity surge is still lower than the more than VND 33 trillion trading volume in late February.
Mr. Phan Nguyen Huu Phuong, Director of the Ho Chi Minh City Branch at DNSE Securities Company, also noted that the main reason for the sharp market correction is foreign investors’ net selling of nearly VND 700 billion, which influenced the sentiment of domestic investors.
“Nevertheless, given that many stocks have increased by 15%-20% recently, profit-taking at this time is normal. The VN-Index does not cause excessive concern,” Mr. Huu Phuong said.
Several experts also believe that the correction is necessary after a period of continuous market growth, even a hot rally. According to Mr. Vo Kim Phung, Deputy Head of Analysis Division at BETA Securities, after a period of upward trend for the VN-Index, many stocks have remained in the “overbought” state, leading to profit-taking pressure and market correction, helping cool down the market.
“The correction could be necessary to reinforce and accumulate for a more sustainable upward trend. Next week, there is a high possibility of fluctuations and continued high-level adjustments, so investors need to be cautious in using leverage and making new purchases for stocks that are still in the “hot” uptrend,” Mr. Phung stated.
