VN market to remain volatile on US vote

HÀ NỘI — Vietnamese stocks are expected to remain volatile early this week until the US presidential election concludes, while foreign trading will help boost the market at the end of the week, experts have said.

Stock indices on the two exchanges suffered four declining sessions this past week, as investors were wary of the market outlook caused by uncertainties in the global markets.

The US Federal Reserve (Fed) late last week decided to keep key interest rates unchanged at 0.25-0.5 per cent, while waiting for the next developments related to inflation. However, many analysts believe that the Fed’s hesitation in hiking interest rates partly came from their concerns about the unpredictable US presidential election, which will be held this Tuesday.

“Index trends will be clearer after the US presidential election on November 8,” stock analysts at BIDV Securities Co (BSC) wrote in their report.

The American election will remain in the spotlight in world financial markets this week. According to both international and local analysts, a victory by Donald Trump would likely be negative news for the world’s stock markets.

“Trump’s victory will be negative news for markets, similar to Brexit, which will place a large impact on investor sentiment. The VN-Index could retreat to 650 or even worse,” BSC analysts predicted.

They also expected that the VN-Index would have a chance to move beyond 690 and head for 700-720 points if Hillary Clinton wins the election.

According to a tracking poll conducted by Washington Post-ABC and released on Friday, Democratic candidate Hillary Clinton is leading Republican candidate Donald Trump by 3 percentage points nationally, but another poll by the LA Times on November 2 showed Trump led Clinton by 5.4 per cent.

The benchmark VN-Index on the HCM Stock Exchange experienced its third declining week, losing 2.3 per cent for the week to close Friday at 666.7 points. It lost a cumulative 3 per cent in the last three trading weeks.

On the Hà Nội Stock Exchange, the HNX-Index also slumped 3.1 per cent for the week, ending the last trading day at 80.5 points. The Index decreased nearly 6 per cent in the last three weeks.

Liquidity was low last week with the daily trading volume averaged at 121.3 million shares, worth over VNĐ2 trillion (US$91 million) per session in HCM City’s market and 35.8 million shares worth nearly VNĐ345 billion on Hà Nội’s exchange.

Slumps by large-cap stocks in key sectors, such as finance and banking, oil and gas, as well as real estate, pushed the market further.

“The VN-Index broke the support level at 670 points. It is likely the index will continue correcting to lower levels,” Trần Hải Yến, analyst at Bảo Việt Securities Co, said. However, she expected positive trading by foreign investors would support the market.

Foreign traders concluded last week as net buyers, collecting shares worth a net value of VNĐ112.3 billion in the two markets. They also executed net buys on both exchanges last month, responsible for a combined net buy value of about $5 million in October. — VNS