Shares fall as investors wait on Fed
Shares fall as investors wait on Fed
Shares fell further on the two local exchanges yesterday as investors waited for the US central bank to indicate its policies for the financial market at a meeting this week.
The benchmark VN Index on the HCM Stock Exchange dropped 0.8 per cent to close at 654.66 points, extending a two-day loss of 1.3 per cent.
The HNX Index on the Ha Noi Stock Exchange dipped 1.2 per cent to finish at 77.88 points. The northern bourse has declined by 2.2 per cent over the past two sessions.
Large-cap stocks remained the major factor that pulled market down, with 18 of the 30 largest companies by market capitalisation recording losses.
Those stocks included dairy firm Vinamilk (VNM), consumer goods producer Masan Group (MSN), banks and property developers.
VNM lost 2 per cent, MSN slumped 3.2 per cent, while the banking and real estate sectors continued to underperform.
Of the nine listed banks, only Sacombank (STB) advanced, inching up 0.1 per cent from Monday, while FLC Group (FLC) was among the worst decliners in the property industry, plummeting 6.7 per cent.
More than 172.6 million shares were exchanged on the two bourses, worth nearly VND2.7 trillion (US$119.95 million).
The decline of large-cap stocks was attributed to increased selling as investors awaited the Fed’s interest rate decision due late Wednesday.
“Investors were kept on edge,” Bao Viet Securities Corp (BVSC) said in a note.
The US central bank is widely expected to increase its lending rates for the first time since December 2015 at this meeting, so what matters to investors now is how the central bank’s new policies will affect the global financial markets, BVSC said.
“Investors will focus on the bank’s statements on expected inflation, the recovery of the employment rate, the frequency of rate hikes in the future and new US policies after Donald Trump takes over the presidency in January.
“Viet Nam’s stock market will unlikely decline strongly if US interest rates are raised as investors have priced in all impacts of the rate hike,” BVSC added.
Local stocks could even recover some recent losses if the US central bank reveals its plan to carefully consider rate hikes next year, improving investor sentiment and reducing pressure from foreign selling, BVSC said.
