Geopolitical tensions in the Middle East and a strong rally in exchange rates are having a heavy impact on the stock market. Following a day off, sentiment was no better; on the contrary, strong selling pressure on the market increased, swamping all efforts to buy the dip this morning. The VN-Index closed the morning session at its lowest level, down 23.08 points or -1.93%, with the number of decliners outnumbering gainers by a factor of 11.
This is the third extremely strong decline in the last four sessions, and the VN-Index has lost nearly 106 points in a very short period of time. The index is now down to 1,169.93 points, its lowest level since the end of January 2024.
A highlight this morning was that liquidity increased strongly again, and the vast majority was due to domestic investors running away. The total matched value of the two exchanges was up to VND12,685 billion, up 114% compared to the previous morning session. The HoSE increased by 109% to more than VND11,292 billion. Of which, foreign investors sold about 9.3% of total transactions on this exchange. Foreign investors even net bought a modest VND85.7 billion on the HoSE.
The nosedive in the blue-chip group is putting enormous pressure on the market. The VN30-Index closed the morning session down 1.71%, with only SHB up slightly by 0.45%. The other 29 stocks declined, of which 14 declined by more than 2%, and six others declined by 1% to 2%. Specifically, the three largest stocks fell shockingly: VIC down 3.78%, CTG down 3.36%, and VHM down 3.35%. These are stocks with very large capitalizations: VHM ranked third, CTG ranked fifth, and VIC ranked sixth in the VN-Index. In addition, TCB, BCM, SSI, and SAB are other stocks that have fallen by more than 3%.
Although the factor of the pillar decline is very clear, that does not mean that the market is only weak in the VN-Index. Throughout the morning session, the downward momentum of stock prices completely dominated. Even when the index recovered the most at 9:45, it still fell more than 5 points, while the market breadth was only 86 gainers/325 decliners. By the end of the session, the HoSE had 42 gainers/447 decliners. Of these, up to 141 stocks fell by more than 3%, and 125 others fell by 1% to 3%. This is an extremely “lethal” state, especially since stocks have been falling for the past three sessions.
Due to the very rapid rate at which prices are falling, almost all T+ buy-the-dip transactions are making losses, and this is alternately creating increasing pressure from the sell side. Investors may wait for prices to recover, but positions using margin do not. Although brokerage firms have different asset handling standards and different time frames, the market knows that such technical sales never care about prices.
On the HoSE this morning, there were 33 stocks with liquidity exceeding VND100 billion, of which only SHB was in the green (matched 221.5 billion). The 22 stocks that fell by 2% or more accounted for up to 44.3% of the total matched value of the exchange, showing extremely concentrated pressure. It is not surprising that stocks with high market capitalization are all among this number, such as PDR, CTS, HAG, TCH, DXG, KBC, VIX, NVL, DIG, etc.
Although there were 42 gainers, only four stocks had liquidity of over VND10 billion: QCG up 3.89% with 33.4 billion; VFG up 2.77% with 11 billion; BCG up 0.65% with 34.1 billion; and SHB up 0.45% with 221.5 billion. This shows that the stocks that held their prices up were simply due to having too few investors trading or very cheap support costs.
Although the market has now begun to receive some Q1 profit results, this information flow is sinking in the larger developments. For example, in the securities group, many companies reported good profits, but prices continued to decline as usual. Tensions in the Middle East are causing oil and gold prices to fluctuate wildly, while the domestic exchange rate has not yet shown any signs of slowing down. At the close of this morning’s session, Vietcombank still maintained a selling price of up to VND25,473 per USD, equivalent to a 4.31% increase since the beginning of 2024.
