Plummeting Continuously
The stock market closed the weekend session, VN-Index fell sharply by 101.75 points (-7.97%) and closed at 1,174.85 points.
This is the biggest weekly decline since October 2022. On the Hanoi Stock Exchange, the main indices also experienced a very strong week of fluctuations in a downward direction.
Accordingly, the HNX-Index ended the week at 220.8 points, down -8.51% compared to the previous week; the UPCoM-Index also decreased by -4.44%, leaving only 87.16 points.
Not only the index, but most industry groups also declined, and the price level of stocks also decreased deeply. The red color remained as the declining stocks were widespread.
Speaking to VTC News, Mr. Nguyen The Minh, Director of Yuanta Securities Vietnam’s Individual Client Research and Development Division, said that the stock trading performance in recent days is not too surprising.
Last week, the stock market had strong declines. (Illustrative image: Fast stock news).
The sharp decline stemmed from significant profit-taking pressure, especially since the VN-Index had been at the 19-month peak for quite a long time. The VN-Index has increased significantly since the beginning of the year (+11% since the beginning of the year), causing the price of many stocks to be relatively expensive.
“There are many reasons why the stock market is in deep decline. That is from the beginning of April until now, the risks have been present such as the sharp increase in the USD price in Vietnam, the increase in US bond yields, and the sharp decline in the US stock market. In addition, the news of tensions in the Middle East is like “the straw that broke the camel’s back”, creating a domino effect that causes the market to decline”,
said Mr. Minh.
Besides, Mr. Minh also said that the deposit interest rates of some banks have increased, while lending interest rates have not increased or have only increased slightly.
“Another reason is that credit growth is still low. It is highly likely that banks will have to sacrifice some profits in the next few quarters to ensure both credit growth but not putting too much pressure on interest rates because the government is still maintaining a loose monetary policy”,
said Mr. Minh.
Meanwhile, Mr. Dao Minh Chau, Deputy Director of SSI’s analysis, said that the volatility of the stock market last week could be due to investors’ psychology being affected by the news of tensions between Iran and Israel. Not only the Vietnamese stock market, but many stock markets in the region are also declining.
Besides, the increase in the USD exchange rate, the soaring price of gold, and the upcoming long holiday also affect demand, causing stocks to lose a significant number of points.
Mr. Dang Tran Phuc, Chairman of the Board of Directors of AZfin Vietnam JSC, said that the stock market decline is not a factor of macroeconomic instability, but may be due to a group of large investors deciding to sell some pillar stocks, leading to the entire market being affected by the domino effect and declining accordingly.
“It is possible that these investors are under psychological pressure and are selling regardless, causing the market to decline rapidly”,
said Mr. Phuc.
In addition, false rumors have appeared in the market, putting psychological pressure on investors.
Opportunity or risk?
Most experts recommend that at this point, the most important thing is that investors need to stay calm and review their portfolios to have a suitable strategy. It is necessary to maintain a calm state of mind, avoid letting emotions take over, and avoid panic selling stocks during sharp market downturns.
Last week, the stock market witnessed strong price declines. (Illustration: Financial Times).
“Investors should not panic and sell during sharp declines, keep a stable mind, wait for recovery beats to restructure the portfolio. Investors should be cautious about the negative developments of the market and keep the portfolio ratio at a safe level.
For the time being, investors can consider short-term purchases in some stocks with good fundamentals and continued rapid decline to strong support zones in the near future”,
Mr. Dao Minh Chau recommended.
Meanwhile, Mr. Dang Tran Phuc said that in the context of a volatile stock market, investors should take the time to analyze the market situation and make decisions based on logical analysis.
According to Mr. Dang Tran Phuc, this is a very good opportunity to continue investing when stocks fall.
“If the stock market overreacts, it could become an opportunity for investors”,
said Mr. Phuc.
Mr. Phuc advises that investors should prepare money to buy stocks at attractive prices with four criteria: Stocks and stock portfolios have a high yield ratio, meaning they are equal to or higher than bank deposit interest rates; Businesses still have the potential to balance their business results when the economy recovers; Businesses do not have business activities that are too dependent on the global economy;
And finally, the valuation must be cheap, lower than the historical average.
However, experts emphasize that investors need to be patient and wait for the right time to buy in. Do not rush to buy when the market is still in a panic phase. At the same time, note to limit the use of margin at this time.
