VN shares extend losses for third day
VN shares extend losses for third day
Vietnamese shares yesterday continued losing for a third day, led by financial firms ahead of the US central bank's decision on interest rates.
The benchmark VN Index on the HCM Stock Exchange lost 0.4 per cent to close at 596.24 points and the HNX Index on the Ha Noi Stock Exchange fell slightly by 0.1 per cent to finish at 81.22 points.
The financial sector, with banks, brokerage firms and insurers, was the major factor that dragged the market down as investors hedged their positions ahead of a possible surprise interest rate hike by the US central bank at midnight. Higher US interest rates would likely strengthen the dollar and put pressure on the Vietnamese central bank to depreciate the dong, a move that would undermine the value of dong-denominated assets, such as Vietnamese stocks.
Insurer index dropped 1.8 per cent, bank index fell 1.1 per cent and brokerage firm index was down 0.8 per cent.
The US central bank is not expected to hike its interest rates at today's meeting, especially after the European Central Bank and the People's Bank of China eased interest rates last week, Nguyen Xuan Binh, Deputy Head of Bao Viet Securities Corporation's (BVSC) Market Analysis said.
Strong profit-taking activities done by investors also pulled those stocks down, Binh said, adding that the selling was a normal action as those stocks had increase sharply recently and the market was lacking positive information. Bao Viet Holdings (BVH) had gained 10 per cent in five days before starting to fall on Tuesday.
At the end of the day, the biggest stocks in the financial sector, including Vietcombank (VCB), the Bank for Investment and Development of Viet Nam (BID) and Saigon Securities Incorporate (SSI) lost 1.1 per cent, 1.6 per cent and 0.9 per cent, respectively.
Binh added that the market was also led down by some exporters who may not benefit as much by the Trans-Pacific Partnership (TPP) free trade agreement as previously thought.
Stocks such as Everpia JSC (EVE) lost 3.8 per cent, fishery producer Hung Vuong Corporation (HVG) was down 1.9 per cent and Century Synthetic Fiber Corporation (STK) dropped 0.6 per cent yesterday – these two stocks have fallen 6 per cent and 2.7 per cent during the last four days.
Meanwhile, large companies such as Vinamilk (VNM), Ma San Group (MSN) and Kinh Do Corporation (KDC) were flat.
The market will likely continue declining in the next two or three days, Binh said, adding that the benchmark VN Index will probably go down and test resistance at 585-590 points as there was not much positive information at the moment.
Both local markets traded more than 153.7 million shares and VND2.72 trillion ($121 million), an increase of 10.3 per cent from Tuesday.
