Market sentiment hinges on Q1 earnings results

Experts are weighing the stock market outlook in the upcoming months as Q1's earnings report season begins and macro risks persist.

The VN-Index closed at 1,219 points last week, down by over 3 points compared to the previous week. The correction followed its test of the 1,240-point resistance level was viewed as a healthy pullback, allowing the market to absorb short-term profit-taking pressure.

Photo: baodautu.vn

According to Dinh Viet Bach, at analyst at the Hanoi-based Pinetree Securities, the VN-Index was relatively stable last week, as concerns over tariff tensions eased while the Q1 earnings season started to unfold.

Market liquidity saw a mild decline, averaging around $800 million per session, indicating that investor sentiment remains cautious.

Capital inflows remain highly selective, concentrating on individual stocks, reflecting a clear sectoral divergence.

Looking ahead to the new trading week, Pinetree’s expert expects continued volatility due to various factors.

The spotlight remains on developments in US-China trade, especially in light of Donald Trump's renewed hardline stance on tariffs, which has stirred speculation among global investors.

Meanwhile, internal factors will play a more significant role as companies begin to release their earnings results in the first quarter.

Bach said that capital inflows are becoming increasingly sector-specific, favouring stocks with strong fundamentals, positive earnings growth, or those benefiting from economic recovery trends.

Last week, the banking and securities tickers continued to lead capital flows, a trend that may persist on expectations of improved profitability and enhanced market liquidity.

“However, the market remains sensitive where sentiment can easily override fundamentals in the short term. As a result, the VN-Index may continue to experience sharp swings around the 1,230-1,235 resistance range, where profit-taking pressure has emerged,” said Bach.

Pinetree’s analyst suggested that in a more optimistic scenario, the VN-Index could retest the 1,265-point level.

However, a more defensive outlook is likely, given the dominance of macro uncertainties. The nearest support level stands at 1,200 points, and if breached, the VN-Index could retreat to fill the gap around the 1,170-point zone.

Dinh Quang Hinh, head of macroeconomics and market strategy at VNDIRECT Securities, noted that the market is gradually forming a supply-demand equilibrium between 1,200-1,250 points after recent volatility.

“Entering the second half of April, attention will likely shift to Q1 earnings results. In the context of low valuations, positive earnings could serve as a key driver of investor sentiment and stock repricing. Companies with strong earnings are expected to attract capital inflows,” said Hinh.

Recent data shows a recovery in credit growth alongside easing deposit interest rates, which bodes well for the banking sector's Q1 performance.

At the same time, the consumer and retail sectors are expected to gain momentum as domestic consumption shows clear signs of recovery, driven by improving income levels and government stimulus policies.

Other sectors likely to post strong results include livestock, seafood, and utilities.

Analysts at HSC Securities assume that the market remains under pressure, with the VN-Index hovering around 1,220 points.

While some demand has emerged after the VN-Index dipping below the key 1,200-point psychological support level, while buying momentum remains modest.

A retest of the 1,200-point level is still on the table, with the stronger technical support area lying in the 1,180-1,200 range.

“The general strategy for investors should be to focus on stocks with limited exposure to tariff risks or those backed by strong fundamentals and sustainable growth prospects. A balanced portfolio allocation between equities and cash is advisable during this period,” said the analyst team.

Song Thuy

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