The upward momentum stalled this morning as inflows refused to buy higher, stepping aside to await fresh selling pressure. The breadth was extremely narrow, painting a different picture than the headline index, as the VN-Index only lost 1.67 points (-0.14%), but almost a hundred stocks were sinking more than 1%. Liquidity on the HoSE floor fell to the lowest level in the past five sessions, decreasing by 21% compared to yesterday morning. Meanwhile, foreign investors had a net selling session of more than VND 400 billion.
Yesterday’s explosive rally created considerable excitement, and liquidity also increased, the best since the beginning of the week. However, after a night, investor sentiment has calmed down, and buy orders chasing prices are no longer seen, leaving the VN-Index immersed in red for almost the entire session. In fact, the index still has a few supportive pillars, so the decrease was relatively small, while stocks fell much deeper.
The lowest level the VN-Index reached was 1,200.9 points. The initial pullback in the first few minutes pushed the index to retest the psychological level of 1,200 points before there was a small amount of bargain hunting. Closing the morning session, the VN-Index only climbed to 1,203.94 points, down 1.67 points from the reference.
This decline does not accurately reflect the trading on the HoSE floor this morning. The breadth was extremely narrow, with 128 stocks increasing/304 stocks decreasing, of which 140 decreased by more than 1%. The liquidity of this weakest group accounted for about 43% of the total trading volume of the floor and in terms of quantity, accounted for more than 39% of the stocks with trading activities.
However, overall liquidity was not high, indicating that the deep decline was mainly due to the withdrawal of buyers. Indeed, among 140 stocks that decreased by more than 1%, only 5 had liquidity exceeding VND 100 billion which are DIG, which decreased 1.75%, SSI decreased 1.12%, VIX decreased 1.74%, TCB decreased 1.17%, and MBB decreased 1.11%. Even stocks with traditionally high liquidity such as HPG, NVL, PDR…, although their prices also decreased significantly, their trading was relatively slow.
Usually, after an unexpectedly strong rally, money flows will wait for prices to retreat to buy more reasonably. Therefore, the price reversal is a normal development, and in such a context, high or low liquidity will mainly depend on the seller. If the seller liquidates many shares, liquidity will certainly be high, and the price will drop further due to hitting the demand waiting below. Conversely, if the seller also chooses a price and sells less, supply and demand will not meet each other easily, leading to low liquidity.
Although the red color spread widely this morning, the market is mainly in a seesaw state. The reason is that, with yesterday’s sharp increase, a large number of stocks bought in the short term have made a considerable profit. Speculators will find it very easy to take profits. This afternoon, cheap stocks from the second bottom test on April 23rd will be available in accounts, and this is an opportunity to observe the selling pressure from the holders.
There were not many strong stocks on the buy side this morning, although there were still 128 stocks in green. Only 45 stocks increased by more than 1%, and very few attracted money flows. The most notable transactions were MWG, increasing 1.73% with a liquidity of VND 559.3 billion; FPT, increasing 3% with VND 440.3 billion; MSN, increasing 1.79% with VND 259.5 billion; VTP, increasing 2.57% with VND 90.4 billion. These stocks are also under some selling pressure, and their prices have not been able to reach their highs. Even FPT, despite surpassing its historical peak, was knocked down by 3.36% compared to the day’s high, and VTP fell by 2.7%.
Foreign investors suddenly increased their selling volume, specifically, the total value of stocks sold on HoSE reached 1,385.8 billion VND, 2.2 times higher than yesterday morning, marking the highest in eight sessions. The buying side was quite weak with 984.8 billion VND, for a net sale of 401 billion VND. However, not many stocks were sold off massively, but this significant net selling value was mainly spread out. The stocks that were heavily sold were MSN -44.6 billion, DIG -35.9 billion, DGC -20.3 billion, and CTG -20 billion. On the buying side, MWG increased by 32.7 billion, TPB by 21.9 billion, and VND by 21.1 billion.
The stalled momentum this morning is a predictable development because most sessions after a day of sharp increase/decrease, the market also temporarily “takes a break”. Short-term speculators currently have the advantage, so weakening liquidity is a good sign, indicating that this group is tending to hold on to their stock.
