Shocked by the stock market "plummeting without brakes"

After the ATO session, the VN-Index fell to 1,070 points, down 30 points in just a few minutes. The market breadth was tilted towards the downside with red accounting for 90% of stocks on the HoSE. All 30 bluechips traded below reference. During the morning session, at times the index of this major exchange lost nearly 50 points. The widespread selling pressure caused the VN-Index to move sideways at a low price.

After the lunch break, the index improved thanks to the performance of the banking group. However, the market quickly deteriorated when dozens of real estate and securities stocks hit the floor. By around 2:20 p.m., the index fell below 1,050 points, down 52 points from the reference.

At the end of the session, VN-Index closed at 1,055.45 points, down more than 46 points. This was the sharpest decline since August 18 - the trading session that triggered the stock market's correction phase so far. The market is at its lowest price since May - the early period of the uptrend.

On the entire HoSE floor, 505 stocks decreased, accounting for 90%. Particularly for the floor-hit stocks, the market recorded 114 units, including many large stocks such as VIC, VHM, VND, VIX, GEX, PDR, NVL, MSN...

Securities, oil and gas, chemical and real estate stocks were the groups that had the most negative impact on the VN-Index. Of which, VHM contributed the most to the market decline, followed by VIC, GAS, HPG, VCB and MSN.

In contrast to the score, liquidity increased sharply today, reaching more than 23,200 billion VND. This level is more than double that of the previous session and the highest in the past month.

Foreign investors today bought more than VND1,600 billion and sold more than VND1,700 billion. This is the third consecutive session that this group has been net sellers with a difference of more than VND100 billion. In addition to VHM, they sold a lot of stocks in SSI, VIC, MSN, VIX.

Psychological effects cause the market to fall sharply

Commenting on today’s market, the head of investment consulting at a securities company in Hanoi said that the selling pressure increased sharply during the ATO session, forcing pillar stocks to hit the floor, which had a strong impact on investor sentiment. When seeing the sideways price zone broken in a negative direction, many people chose to cut their losses.

"The market has been in a tug-of-war state for many recent sessions, with the main sentiment being cautious observation. The unexpected developments at the beginning of today's session have caused many investors to decide to sell everything and wait for new developments," said this expert. According to him, the VN-Index falling below the 1,080-point threshold is significantly worsening the market trend. The HoSE index may find its next support level in a lower area.

Meanwhile, Mr. Huynh Hoang Phuong - Director of Investment Research and Analysis at FIDT, said that there are two reasons for the sharp decline in the market this morning.

First, the market sentiment is weak and easily affected by news factors. This morning, the news that Vingroup is about to issue convertible bonds was not positively evaluated by the market, especially by foreign investors. The strong selling pressure of "Vin" stocks in the ATO session, mainly from foreign investors, triggered widespread concern in the market.

Second, Asian markets fell sharply this morning after news of weaker-than-expected earnings for US tech stocks. Rising US bond yields also added to concerns about emerging market (EM) stocks.

This afternoon, Vingroup Corporation announced that it had just completed the offering of 250 million USD in international bonds on the evening of October 25. These bonds can be converted into Vinhomes shares owned by Vingroup, maturing in 2028. This is the first convertible bond on the international market of a Vietnamese enterprise this year.

However, this morning, some international investors participating in the above transaction sold Vinhomes shares as a risk protection measure (hedging) to complete the bond investment transaction. This hedging was carried out between investors in limited quantities and according to Vingroup only affected the market in the short term.

According to Mr. Do Tien Duy - VISC Securities analyst, today's decline is only short-term. However, when the market is on a downward trend, more negative news in the near future can trigger a similar sell-off as today.

Recently, VN-Index has fluctuated strongly in ATO and ATC sessions. This expert believes that this is an unpredictable sign, so investors need to plan before trading.

He advised that everyone needs to identify the market trend in order to come up with appropriate methods and directions for each stage. Investors should also set clear profit-taking and loss-cutting prices, maintain a stable mentality, not make decisions based on emotions, and always manage risks appropriately.