Recovery of blue chips last week helped lift stocks on the HCM City Stock Exchange, despite anticipated cautious trading prior to the long New Year holiday.

The benchmark VN-Index gained a cumulative 1.96 per cent to close December 26's session at 533.37 points.

The VN30, which tracks the top 30 shares by market value and liquidity, also increased 2.07 percent to end at 582.45 points.

Additionally, the impact of volatile global oil prices began to decline, as many oil and gas stocks recovered in the final session of the week. Following a steep fall on December 25, large-cap shares, such as PV Gas (GAS) and PetroVietnam Drilling and Wells Service Corp (PVD), climbed 3.7 percent and 0.8 percent, respectively, on December 26. Along with other blue chips, including Vietcombank (VCB), Bao Viet Holdings (BVH), Saigon Securities Inc (SSI) and VinGroup (VIC), which reassured investors.

However, liquidity dropped substantially as investors became more cautious before the long holiday, which begins on January 1.

Also, trading volume declined 43 percent from the previous week's level, averaging nearly 95 million shares, worth 2.145 trillion VND (100.2 million USD) per session in the HCM City's market.

On the other end of the spectrum, the HNX-Index on the Hanoi Stock Exchange lost 0.23 percent during the week, finishing on December 26 at 81.14 points.

The market volume here also decreased 26.5 percent compared with the previous week, averaging 51.3 million shares and was valued at 625.2 billion VND (29.2 million USD) per day.

Continuous net buying by foreign investors was a positive sign last week. The foreign sector picked up another 540.4 billion VND (25.3 million USD ) in shares on the two exchanges, of which they were responsible for a net buy value of 504.6 billion VND (23.6 million USD) in HCM City.

This was the fourth week in a row that the foreign sector were net buyers in the market, with a total net buy value of up to 874 billion VND (40.8 million USD).

According to many analysts, foreign investors will tend to extend their purchases towards the end of the year. The statistics of BIDV Securities Co (BSC) show that foreign investors actively buy shares in the last week of the year.

In the five years from 2009-13, the foreign sector was net buyers in the final trading week of the year, except in 2011. Records indicate they bought 381.5 billion VND in shares in 2009, 267.4 billion VND in 2010, 793.6 billion VND in 2012 and 491.3 billion USD in 2013.

"We believe that the portfolio restructuring of foreign investors is finished and will reduce selling pressure from this sector. Besides, the major markets in the world have strongly recovered after information was released that the US Federal Reserve is considering raising the interest rate in April next year. It's expected to reduce foreign selling and support market growth," BSC wrote in a report.-VNA