VN stocks fall amid Fed fears
VN stocks fall amid Fed fears
Vietnamese shares yesterday fell on both local bourses as investors worried that a possible US central bank interest rate hike in March could help weaken the local currency, undermining bank profits.
The benchmark VN Index on the HCM Stock Exchange fell 0.6 per cent to close at 539.47 points and the HNX Index on the Ha Noi Stock Exchange inched down 0.1 per cent to end at 76.16 points.
Investor confidence faltered after the US central bank signaled after a meeting that it could hike interest rates in March on expectations that global economic conditions will improve and the recent slowdown of global stock markets is temporary.
Investors, eyeing the recent sharp drops in the Chinese and US stock markets, are concerned the US Federal Reserve may raise rates too quickly.
Banks and brokerage firms retreated from Wednesday gains. The brokerage sector index dropped 0.7 per cent, led by Sai Gon Securities Incorporation (SSI) and HCM City Securities Corporation (HCM), which fell 1 per cent and 1.4 per cent, respectively.
The banking sector index was down 1 per cent, led by the Bank for Investment and Development of Viet Nam (BID) and Vietinbank (CTG), which slumped 4.1 per cent and 1.7 per cent. These two banks had also gained 15 per cent and 8.7 per cent during the three previous sessions.
However, the Fed will likely take a cautious approach to raising rates, which should keep Viet Nam's foreign exchange rate stable, Sai Gon-Ha Noi Securities Corp. wrote in a report.
Yesterday, Viet Nam's central bank reduced the reference mid-point rate for its exchange trading band by VND7 to VND21,886 a US dollar, bringing the rate to below VND21,890 for the first time since the bank started adjusting the rate on a daily basis starting January 4.
Meanwhile, energy stocks pulled back from Wednesday gains after global oil prices weakened during yesterday session. US benchmark crude West Texas Intermediate (WTI) slid 1.4 per cent to trade at $31.84 a barrel while London-traded Brent crude fell 1.1 per cent to trade at $32.73 a barrel.
The energy sector index yesterday dropped 0.9 per cent, led by PetroVietnam Mud Drilling Corporation (PVC), PetroVietnam Technical Services Corporation (PVS) and Petroleum Equipment Assembly & Metal Structure JSC (PXS), which fell 0.8 per cent, 2.7 per cent and 0.9 per cent, respectively.
Both local markets traded nearly 160 million shares worth VND2.3 trillion ($101 million), a slight increase from Wednesday's trading value but still lower than last year's daily trading value of $111 million.
