HANOI: The stock market witnessed a sharp decline in the last week of June, marked by strong net selling from foreign investors, who have been net sellers for the past five quarters.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,245.32 points, while the HNX-Index on the Hanoi Stock Exchange (HNX) ended at 237.59 points.

Both benchmark indices recorded weekly losses, with the HoSE down 36.7 points or 2.86% and the HNX dropping 6.77 points or 2.77%.

Liquidity on HoSE saw a significant drop, with the market’s trading value reaching 17.6 trillion dong per session, reflecting a 10.6% decrease from the previous week.

Foreign investors showed no signs of slowing down, continuing to net sell nearly 4.5 trillion dong in the last week of June, with FPT Corp shares and FUEVFVND fund certificates accounting for over 70% of the sell-off.

According to statistics, foreign investors have been net sellers for the past five quarters, particularly in the first half of 2024, likely due to the pressure of capital withdrawal as the exchange rate remains high.

Since the beginning of the year, the estimated net selling value has reached nearly 45 trillion dong. The foreign ownership ratio in the stock market is currently at 17.5%, down about 0.75% from the end of 2023.

Although market volatility may persist in upcoming sessions, as long as the support zone of 1,250-1,270 points is maintained, the short-term trend remains stable, with 1,300 points being the nearest target.

Analysts at Saigon-Hanoi Securities recommend that short-term investors continue to hold their existing positions and maintain upward momentum.

Additionally, adjustments around the strong support zone present opportunities to optimise stock accumulation, especially in stocks with strong momentum and significant growth potential.

In the medium term, the VN-Index, after experiencing selling pressure at the upper trend line around the 1,300-point region, is now under pressure to retest the area around 1,250 points.

Given the negative performance at the end of the second quarter of 2024, the VN-Index is expected to recover and test the 1,255-point level, corresponding to the peak in September 2023. If it fails to break above this level, the VN-Index may enter a less positive accumulation phase within the range of 1,190 points-1,200 points to 1,245 points-1,255 points.

As the market transitions into the third quarter and awaits the release of second-quarter business results and gross domestic product growth data later this month, it will be a sensitive period for investors.

 - ANN