Stocks plummet, VN-Index "free-falls" nearly 25 points: What is the cause?

The Vietnamese stock market today, August 1, experienced a volatile and panicked trading session. The sell-off increased and spread as many investors tried to get out regardless of the floor price.

At the end of the session, VN-Index had 423 red codes but only 45 green codes, the index evaporated 1.96% (-24.55 points), the strongest level in the past 30 sessions. During the trading session, there was a time when VN-Index flew nearly 29 points. This result wiped out all previous recovery efforts.

The market has just passed the peak of companies announcing financial reports, information continuously pouring in in the past few days has been a good catalyst for the VN-Index to recover. However, the previous positive developments completely reversed in today's trading session.

Right from the beginning of the session, selling pressure appeared and increased, especially in the afternoon session. This shows that investors are becoming cautious and tending to take profits.

Most industry groups were under downward pressure, especially telecommunications, chemicals, securities and real estate. Red covered more than 420 stocks on HoSE, all industry groups, from large stocks to small and medium stocks, adjusted.

On HoSE, nearly 30 stocks fell to their full range, including EVF, AGM, BFC, CMG, CTS, DPG, HAH, LHG, NHA, QCG, SMC, TLH... By the end of the day, many of these stocks still had a large amount of remaining shares sold at the floor. Stocks falling to the floor were concentrated in the real estate group.

In the top 10 stocks that negatively affected the market's decline today, there were FPT (-2.95%), GVR of Vietnam Rubber Industry Group (-4.85%), MBB (-4.1%), BCM (-7%), TCB (-1.08%)...

In the VN30 basket, only 2 stocks increased in price, the rest decreased. Large-cap stocks such as FPT, GVR, MBB, BCM... contributed significantly to the index's decline.

During the session when the market fell sharply, foreign investors returned to buy stocks, with a net purchase of 115 billion VND, focusing on VCB, VNM, MWG, MSN, DBC...

The large-cap group became a burden for the VN-Index, with many stocks falling by 3-5%. GVR, FPT, MBB, BCM, BID, VPB... were the stocks with the most negative trading. Among the leading profit groups in the second quarter, MB was the bank stock with the sharpest decrease of -4.1%. A series of stocks STB, TPB, VIB, ACB, VPB... were flooded with red.

Influential and liquid industries such as securities, steel, construction, etc. also decreased sharply.

On the HNX floor, the HNX-Index fell 6.13 points (2.6%) to 229.23 points. The UPCoM-Index fell 1.55 points (1.63%) to 93.52 points. Selling pressure pushed liquidity to skyrocket, with the HoSE order matching value reaching VND20,200 billion. Of which, in the afternoon session alone, VND13,000 billion was matched through the HoSE floor, double the amount of money poured into this floor in the morning session.

Why did the stock market plummet?

The sharp decline in the market today has surprised investors, because domestic macroeconomic indicators are showing positive signs, production activities are going well. At the same time, foreign direct investment (FDI) is also growing positively.

Explaining this situation quickly, many experts believe that the main reason is that investors' psychology is being negatively affected and is increasingly widespread. Experts from VPS Securities Company believe that during this period, many people are afraid of a deep market decline, along with international geopolitical risks, so investors' psychology and behavior cause stocks, whether good or bad, with promising business results, to be sold off heavily.

In addition, the market is likely to be retesting the support zone of 1,200 - 1,220 points. After increasing to touch the resistance zone of 1,257 - 1,260 points, the indices easily fell deeply, instead of just fluctuating within the range of 1,255 - 1,260 points.