Market corrects after long rally

Hanoi (VNS/VNA) - Shares declined on the two exchanges on September 19 as investors increased selling to capitalise on profits after a long rally.

On the Ho Chi Minh Stock Exchange, the VN-Index erased September 18’s gains, edging down 0.24 percent to end at 805.93 points. The key market index increased 0.25 percent in the previous session.

On the Hanoi Stock Exchange, the HNX-Index dropped 0.38 percent to end at 104.73 points. The northern market index gained 0.62 percent on September 18.

The overall market breadth was negative with 249 stocks falling, 201 rising and 263 remaining unchanged.

There was no consensus among large-cap stocks as 17 of the top 30 largest shares by market value and liquidity on the southern bourse (VN30) declined and 11 advanced.

Vinamilk (VNM), brewer Sabeco (SAB), Vietcombank (VCB), Mobile World Group (MWG), Masan Group (MSN) and PV Gas (GAS) were among losers.

Stocks which maintained an upward trend included VinGroup (VIC), FLC Faros Construction (ROS), Vietinbank (CTG), BIDV (BID), insurer Bao Viet Holdings (BVH), IT group FPT (FPT), steelmaker Hoa Phat Group (HPG) and PetroVietnam Drilling and Well Services (PVD).

“The fact that many stocks corrected today had created strong pressure on the market, which is proven by the decrease in the afternoon trade,” analysts at BIDV Securities Co wrote in a note.

Profit-taking pressure increased after the VN-Index touched the 810 resistance level in early afternoon trade. However, the positive signal was that money shifted from large caps to speculative stocks in the real estate, construction and building materials.

The most active stocks on September 19 included FLC Group (FLC), Sai Gon Thuong Tin Real Estate (SCR), KLF Joint Venture Global Investment (KLF), Kim Vi Inox Import Export Production (KVC) and C.E.O Group (CEO) with trading volume of between 2-19 million shares each.

According to analysts at Vietnam Investment Securities Co, cash flows tend to look for stocks that are expected to have positive third-quarter earnings. However, there is still a long time to go before the reporting season so the market will likely see large divergence.

“Thus, the selection of stocks is very important and investors should be consistent when looking for stocks to increase,” analysts said.

Liquidity decreased slightly with a total of 230.4 million shares worth a combined 4.5 trillion VND (198.2 million USD) being traded in the two markets, down 9.3 percent  in volume and 2.2 percent  in value compared to the previous session.-VNA