Hanoi (VNA) - The benchmark VN-Indexcould surge back to the 732 points peak seen a month ago on the back of strongbuys by foreign investors as well as positive economic indicators, analystssaid.

“I share the view that the VN-Index will conquerthe old peak of 732 points in May, though it will not be easy,” said Nguyen NgocLan, head of analysis at Agribank Securities Joint Stock Company.

Lan told financial portal tinnhanhchungkhoan.vn thatgiven the information deficiency in May, macroeconomic statistics show that thenational economic condition is improving and on a good track of recovery.

In addition, steady buys by foreign investorswill remain a major boost to the market, Lan said.

After the public holidays early last week, theVN-Index had a positive start this month with a rise of 0.3 percent in the lastthree trades, closing on May 5 at 720 points.

On the Hanoi Stock Exchange, the HNX-Index wasup 0.2 percent for the week, ending on May 5 at 89.71 points.

Vietstock’s data showed foreign investors havebeen collecting local shares in the past three months for a total value ofroughly 5.2 trillion VND (229 million USD), excluding extraordinary negotiationvalue.

Large-cap stocks, mainly banks, were the majorsupport for the market last week as most of listed banks gained substantialvalue after they reported impressive profits in the first quarter.

“The VN-Index has sent positive short-termsignals when staying firmly above the support 720 point level. Investorsentiment is optimistic, reflecting in high liquidity and progressive movementsof financial stocks,” said Vu Minh Duc, head of analysis for individual clientsat Viet Capital Securities Joint Stock Company.

Duc said besides blue chips, money flows arealso seeking to medium- and small-cap (penny) stocks which are promising largergains in the short term.

Low-valued shares of automobile dealers,fertilizer manufacturers, sugar producers, plastic products makers and realestate companies had an exciting session on Friday with many advancing onstrong buys by local investors.

“In my opinion, though fundamentals of thisstock group are not prominent, short-term returns are feasible for risk-takinginvestors,” Duc

Liquidity remained high with over 263 millionshares averaging 4.9 trillion (nearly 216 million USD) traded in a singlesession in the two markets last week.

However, large-cap stocks which are usually themarket supporter have shown signs of weakening, particularly banks andprominent food and beverage firms like Vinamilk, Masan Group, Kido Group, andHabeco.

“The market needs another leading stock group asbanks will find it difficult to maintain their rise after sharp gains last weekwhile investors increase profit taking,” analysts at Vietnam InvestmentSecurities Joint Stock Company (IVS) wrote in a note.

IVS reckons the VN-Index may continue its risebut has warned the market is entering the sensitive area where downsidepressure is building and the market needs more supportive factors to sustainits growth.

Oil and gas stocks have declined steeply in thepast week and stayed in their bottom range because of unfavorable movements inthe global oil markets.

PetroVietnam Drilling and Wells Service (PVD)traded at its lowest price of around 16,500 VND a share since its debut inDecember 2006, after the company reported a loss of nearly 200 billion VND inthe first quarter.

The biggest listed energy stock, PV Gas (GAS),also gave in over 2.2 percent in the last four sessions.

Global oil prices marked the fifth decliningsession on May 4 to their lowest since mid-November due to increasing supply inthe US market. The US West Texas Intermediate (WTI) and Brent crude both dipped4.5 percent to settle at 45.43 USD and 48.26 USD a barrel, respectively.

A report by Bao Viet Securities said that the USoil output rose over 10 percent since mid-2016 to 9.3 million barrels per day,levels not far off top producers Russia and Saudi Arabia, and making itpossible that the output cut agreed by OPEC early this year would not work.

At home, some oil and gas companies sufferedlosses in the first quarter while some have targeted lower business results in2017.

Prospects of this stock group are largelydiscounted on the back of volatile global oil prices.-VNA