Market awaits Fed's rate hike decision

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,234.03 points, while the HNX-Index on the Ha Noi Stock Exchange (HNX) ended the last trading day at 272.88 points.

An investor tracking the market's movements. - Photo laodong.vn

For the week, the market benchmark fell 1.18 per cent, marking its third straight weekly decline. The HNX-Index lost up to 4.13 per cent last week.

Trading value on three stock exchanges totalled nearly VND75.1 trillion (US$3.1 billion), equivalent to an average of VND15 trillion per session, down 15.5 per cent over the previous week.

The trading value on the southern bourse fell by 15.4 per cent, while trading volume fell by 19.4 per cent. On HNX, the trading value and trading volume also decreased by 7.8 per cent and 15.1 per cent, respectively.

Foreign investors were net sellers on two main exchanges last week, with a net value of VND901.19 billion. In terms of net volume, Sacombank (STB) was sold the most with 15.5 million shares. On the other side, PV Drilling (PVD) was bought the most by foreign investors with 12 million shares.

The VN-Index hit the bottom at 1,140 points in July, recovered in August, and corrected again in September. With a psychological support zone of around 1,200-1,225 points, the important resistance levels are 1,250 - 1,260 points.

There is still a positive point as the short-term demand in public investment, energy, and food stocks is increasing.

For a long-term investment, Saigon - Hanoi Securities JSC (SHS) believes that the market is still accumulating on the basis of a low valuation that is lower than the average of the last five years.

Investors are recommended to maintain a reasonable proportion of stocks while waiting for more news on the business situation of enterprises as the third quarter of 2022 is about to end, macro information, GDP growth, and the trend of the general market.

MB Securities Company (MBS) said that this week's focus is the Fed's monetary policy meeting on September 20-21. Markets see a rate hike of 0.75 percentage points, while the chance of 100 basis-point raise is increasing.

Therefore, if the Fed raises rates by 0.75 percentage points, the market will have a positive reaction, and vice versa, if the Fed hikes rates by 1 percentage point, the market will face fluctuations. The index has the support zone at 1,218- 1,220 points.

Meanwhile, according to Bao Viet Securities Company (BVSC), as the market is still facing potentially risky events ahead such as the FOMC monetary policy meeting and domestic exchange rate pressure, it is likely to continue to be under declining pressure in the first sessions of this week.

The market may stabilise and recover gradually towards the end of the week.

BVSC said that investors in general will continue to take a watch-and-see approach this week to observe the market's reaction to the Fed’s interest rate decision. Buying activities for accumulation are only done in strong correction sessions.

SSI Securities Corporation thinks that the benchmark VN-Index will retest the support area near 1,230 points in the first session of the week. If it recovers from this support area, the index will have a chance to head towards 1,250 points.

However, if it is unable to sustain above the 1,230-point threshold, it is likely to find a balance point between 1,220-1,200 points.

Similarly, BIDV Securities Company said that this week, the VN-Index will still struggle at the support level of around 1,230 points, or may continue to drop to 1,220 points.

Market recovers from recent losses The market finished higher on Thursday as some bargain-hunting efforts lifted sentiment.

Caution persists in realty stock prices Although the valuation of the real estate industry and stocks are discounted to a low level, Agriseco still takes a cautious view of the sector due to a lack of short-term rally momentum.