Shares sink on exchange rate turmoil
Shares sink on exchange rate turmoil
China's sudden devaluation of the yuan today, accompanied by the State Bank of Vietnam's decision to revise the exchange rate band had negative impact on the domestic stock market.
The SBV has revised the exchange rate band from plus or minus one per cent to plus or minus two per cent
China's central bank this morning cut its official guidance rate by another 1.6 per cent after a sudden devaluation of nearly two per cent on Tuesday. China's sudden moves are triggering a turmoil in the world financial market. This is the second devaluation by China in two days, pushing the yuan down to 6.3306 per US dollar, the lowest since August 2011.
Many currencies and stock indices in the world sank after China's decision.
The State Bank of Vietnam said the devaluation of the yuan would greatly affect the trade value between Viet Nam and China. The SBV this morning also decided to set the ceiling exchange rate at VND22,106 per US dollar, and the lowest rate at VND21,240.
On the HCM Stock Exchange, the VN-Index, which tracks 306 stocks, edged down 1.05 per cent to close at 606.64 points.
Meanwhile, the VN30, which tracks the top 30 shares by market value and liquidity, was also down 1.14 per cent to end at 636.06 points.
Overall, the market condition was negative as the losers were more than double the number of gainers.
Trading was less active, with just 54 million shares worth more than VND1.064 trillion (US$48.8 million) being exchanged by the end of the morning, down 60 per cent in value compared with yesterday's level.
On the Ha Noi Stock Exchange, the HNX-Index also fell 0.72 per cent to stand at 83.24 points, with a market value of VND301.3 billion ($13.8 million).
Of the total 365 shares, 100 fell, 48 rose and 217 closed flat.
The afternoon session will begin at 1pm.
