Heavy trading in blue chips by foreign investors on the HCM City Stock Exchange helped lift the VN-Index yesterday to a close of 495.48, a gain of 1.55 per cent.
The volume of the day's trades fell slightly, however, to 26.1 million shares, worth a combined VND1.2 trillion (US$63.8 million).
While domestic trading saw no improvement, foreign investor buys soared to 3.34 million shares, worth a total of VND240 billion ($12.8 million), their biggest day of the year so far.
Vinamilk (VNM) surprised the market to seize the position as the most heavily-traded share on the southern bourse with nearly 1.54 million changing hands, of which almost a million were purchased by the foreign sector.
"According to my observation, foreign investors are keen to invest consistent with the moves of the Dow Jones," said Ta Thu Tin, an analyst with Au Viet Securities Co. "Increases in the Dow Jones and other major international stock indices yesterday boosted their confidence and promped their buy-in."
In addition to VNM, foreign investors favoured such other blue chips as software giant FPT, Saigon Securities Inc (SSI), real estate developer Hoang Anh Gia Lai (HAG), and Song Da Urban and Industrial Zone Investment and Development Co (SJS).
Without as much support from foreign investor trades yesterday, the HNX-Index also advanced by 0.63 per cent to close at 161.92 points. Trading volume on the Ha Noi Stock Exchange dropped by 9 per cent to 12.9 million shares, for a value of just VND449.2 billion ($23.9 million).
Foreign investors were net buyers in Ha Noi by a volume of only 166,200 shares, worth just VND7.2 billion ($382,978).
Vinaconex (VCG) rose to be the most active share on the northern market with 2.6 million shares traded.
Dong A Securities Co analyst Tran Vu Minh Hai said that, while institutional investors' trades were modest, major individual investors were sitting out the market, depressing trading volumes.
"Investors are concerned over the State Bank's monetary policies," Hai said, also pointing to ongoing worries over commercial bank liquidity and the availability of bank credit for securities trading.
Many analysts agreed the market would continue to fluctuate within a narrow band through the Tet (lunar new year) holiday.