Energy stocks extend market gains

Energy stocks extend market gains

Vietnamese shares yesterday continued positive trends on both local markets, led by energy stocks, as crude prices rose for a second day.

The benchmark VN Index on the HCM Stock Exchange advanced 1.3 per cent to close at 567.79 points. The southern index gained 2.2 per cent in the last two sessions.

The energy sector was the major factor that lifted the markets as global oil prices extended gains for a second day on hopes that an agreement on a production freeze could be reached without Iran's participation.

US crude West Texas Intermediate (WTI) rose 2.8 per cent to trade at US$36.90 a barrel, up 3.4 per cent in two days, and London-traded Brent crude moved up 2.1 per cent to trade at $38.65 a barrel, an increase of 2.5 per cent.

Among local energy stocks, PetroVietnam Gas Corporation (GAS) and PetroVietnam Mud Drilling Corporation (PVC) surged 4.9 per cent and 4.6 per cent, respectively.

PetroVietnam Drilling and Well Service Corporation (PVD) and PetroVietnam Technical Service Corporation (PVS) also made gains.

Additionally, a stable exchange rate set by Viet Nam's central bank helped attract foreign investment in the stock markets and boost leading sectors such as banks, food and beverage producers, and insurance companies.

Yesterday the central bank set its reference mid-point rate for exchange trading bands at VND21,857 per US dollar, an increase of VND4 from Tuesday.

The mid-point rate dropped after the dollar weakened against other currencies following the US central bank's statement that it will carefully raise interest rates at a lower pace this year, and has been little changed in the last five trading days, while the forex rates set by local banks yesterday remained the same or were lower than Tuesday.

In the banking sector, the four biggest banks - Vietcombank (VCB), the Bank for Investment and Development of Viet Nam (BID), Vietinbank (CTG) and Sacombank (STB) - rose between 0.9 per cent and 2.4 per cent.

In the food and beverage sector, seafood companies Ntaco Corporation (ATA) and Hung Vuong JSC (HVG), and food producer Masan Group (MSN), added 6.8 per cent, 2.9 per cent and 0.7 per cent, respectively.

Insurance companies such as BIDV Insurance Corporation (BIC), Bao Minh Insurance Corporation (BMI) and Bao Viet Holdings (BVH) advanced to drive markets up.

Textile firm Mirae JSC (KMR) surged 6.3 per cent after the company said it will ask for approval from shareholders to lift foreign ownership in its capital to 100 per cent.

Both local markets traded nearly 166 million shares worth VND2.73 trillion ($121.3 million), slightly lower than Tuesday's trading value.

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