VN-Index drops sharply, what should small investors do?

(NLDO) – VN-Index has decreased for two consecutive sessions with strong selling pressure from foreign investors – which is considered as "smart money flow", is it an indicator for investors?

After nearly 4 months of continuous price increases and especially 6 weeks of sublimation with explosive liquidity, VN-Index suddenly turned down when approaching the historical peak of 1,550 points. At the end of the trading week from July 28 to August 1, the main index of the market fell deeply to 1,495 points, down 2.35% compared to the end of last week.

VN-Index drops sharply, what should small investors do?

Profit-taking pressure appeared in the last two sessions of the week, causing many groups of stocks to fall sharply. Industries such as retail, technology - telecommunications, seafood, agriculture , steel and real estate were not outside the correction wave.

Some sectors remained strong for most of the week, such as securities or shipping stocks.

However, by the last session of the week, selling pressure also spread, causing many stocks to lose value. Market liquidity reached a record last week, with an average value per trading session of nearly VND49,000 billion. Meanwhile, foreign investors surprised everyone by net selling more than VND4,750 billion on HoSE in just one week.

VN-Index fell sharply after a series of consecutive increases over the past several months.

After a series of strong net purchases in July, foreign investors suddenly "turned around" in recent sessions. On July 29, right when the VN-Index reached 1,550 points and the market was at its most active, foreign investors "dumped" with a net value of more than VND880 billion.

Mr. Tran Khanh, an investor in Ho Chi Minh City, shared: "I see that the market has increased very strongly in the past few days, but foreign investors are still net sellers continuously. The last two sessions of the week sold more than 4,000 billion VND. I wonder if this is a sign that the market is about to make a stronger correction?"

Follow the smart money

However, experts recommend that investors should take a more objective view of foreign investors' moves. At a recent stock talk show organized by the Lao Dong Newspaper , Mr. Le Huu Thoai, Director of the Online Customer Department of Rong Viet Securities Company, emphasized that foreign investors' moves should not be considered as a guideline for personal investment strategies.

Foreign investors net sold more than 4,700 billion VND last week on the stock market.

Mr. Thoai cited that in the first 6 months of the year, foreign investors had net sold up to 40,000 billion VND but in early July they quickly net bought 11,000 billion VND. Although the overall market was still a net seller, the VN-Index continued to hit new peaks. This shows that the actions of foreign investors should only be for reference, not a decisive factor.

However, calling foreign capital flow "smart money" is not without basis. According to analysis from some securities companies, when VN-Index was still in the 1,280 - 1,300 point range, foreign investors started buying very strongly. And just 2 weeks after the index surpassed 1,400 points, they continued to pour in another 11,000 billion VND - a net purchase level showing decisiveness and sensitivity to market trends.

Mr. Vo Diep Thanh Thoai, Head of Senior Client Department of DNSE Securities Company, shared that there was a time when the market reached 1,400 points and was likened to "peak chasing" due to strong net buying by foreign investors. But in reality, VN-Index continued to surpass the 1,500 point threshold afterward, reflecting that foreign money is still very strategic in its approach to the market.

According to Mr. Thanh Thoai, investors should not focus too much on absolute points such as 1,400 - 1,500, because this can easily create an unrealistic feeling of "high" or "low". What is more important is to monitor which industry groups and stocks foreign money is prioritizing, and from there make decisions in line with the general trend instead of just reacting to news or short-term fluctuations.

Source: https://nld.com.vn/vn-index-giam-sau-khoi-ngoai-xa-hang-nha-dau-tu-nho-nen-lam-gi-luc-nay-196250802085559433.htm