Why did the stock market drop 64 points?

The 64-point drop in stocks today is a necessary correction after a period of hot market growth, according to experts.

Stock market fell sharply on July 29

At the end of the trading session on July 29, the VN-Index - the index representing Vietnamese stocks - decreased by 64 points, equivalent to 4.1%, to 1,493 points. Yesterday, this index reached a record high of 1,557 points.

The market had 666 stocks decrease, in which the entire VN30 group - the companies with the largest market capitalization and good liquidity - were in red. However, liquidity set a new record, reaching more than 76,000 billion VND (about 3 billion USD).

Experts say today's sharp decline is not surprising, as this is a necessary correction after the hot increase of previous sessions.

Mr. Tran Quoc Toan, Director of Branch 2 - Headquarters of Mirae Asset Securities Joint Stock Company, said that today's short-term adjustment was predicted, when VN-Index increased by 181 points in less than a month.

Mr. Toan analyzed that the market had been down since the morning, but a strong selling momentum had appeared since the beginning of the afternoon session. "Market liquidity after 2 p.m. increased dramatically by VND20,000 billion in just 30 minutes. This is a sign of investor panic," said Mr. Toan. However, this expert said that it was completely understandable for investors to take profits.

Sharing the same view, Mr. Nguyen Thanh Trung, CEO of investment consulting and trust company FinSuccess, commented that this was a positive adjustment session as the market has increased by 300 points since the beginning of April. Today's session recorded a record liquidity of nearly 72,000 billion VND. More than 2.79 billion shares were sold, meaning that investors bought the shares.

In addition to the above reasons, Mr. Tyler Nguyen Manh Dung, Senior Director of Market Strategy Research, HSC Securities Company, said that one of the large brokerage companies focusing on individual customers has cut margin lending, affecting the market.

Analysts believe that this decline may continue in the short term. Mr. Tyler Nguyen Manh Dung commented that this decline opens up an attractive accumulation opportunity for many investors, after they missed the recent increase. However, from a technical perspective, short-term risks still exist as the correction from the peak in previous positive market cycles can range from 5% to 15%.

Saigon - Hanoi Securities (SHS) commented that with these developments, the VN30 index may be under pressure to retest the highest price zone of 2021, corresponding to 1,560-1,590 points, while the VN-Index will have a support zone around 1,450 points.

The Thanh Cong Securities (TCSC) analysis group said that after the 64-point loss, the VN-Index has "broken" from the 1,500-point zone. These sessions are difficult for investors to predict, so the usual reaction is to reduce the holding ratio to preserve the results.

TCSC predicts that the market will likely continue to decline in the morning session of July 30 following its previous inertia. Therefore, investors need to observe the absorption capacity in this area in case of a deeper correction. According to the observation of the analysis team from TCSC, usually after a correction of more than 3% during an uptrend, the market can only break out in the next 2-3 weeks.

In this context, for the group of investors holding many stocks, Mr. Nguyen Thanh Trung advised them to review their portfolio. "If the portfolio has many high-risk stocks that decrease more than the general market, investors need to consider restructuring," Mr. Trung recommended.

Investors should also filter and retain stocks with good fundamentals to help the portfolio decrease less than the general market and vice versa when stocks recover, the above codes increase more strongly. At the same time, buyers also need to comply with margin borrowing at a safe rate to avoid losses during periods of market volatility.

However, experts believe that stocks still have room for growth in the medium and long term. According to Mr. Tyler Nguyen Manh Dung, the market can continue to rise thanks to stable macroeconomic factors, the Government's growth promotion policies and the gradual recovery of listed companies' profits.

He added that demand outside the market is still very strong. Many active funds and individual investors have not yet fully disbursed cash in their portfolios and are waiting to buy when the market corrects.

Sharing the same view, Mr. Tran Quoc Toan said that the current low interest rate level will support the growth of the stock channel. In addition, the market reform efforts of the management agencies for the goal of upgrading in September according to the FTSE Russell standard are the foundation for the VN-Index to continue to surpass the peak.

TCTS estimates that the market valuation is higher than the five-year median. In addition, the story about the possibility of upgrading the stock market in September is also a factor attracting investor cash flow. Therefore, TCTS's analysis team believes that the VN-Index still has room to increase, but not as strongly as in July. After that, the market will enter a distribution phase (large investors sell stocks after the market peaks) or rotate cash flow to other sectors. That is, stock prices may go sideways or decrease, and there will be no more overheating.

VnExpress

Source: https://baohaiphongplus.vn/vi-sao-chung-khoan-giam-64-diem-417548.html