Market rallies on news of interest rate cut

March 12, 2012 | 18:00

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The market recovered slightly at the end of today’s session amidst strong selling pressure, helped by an official announcement of interest rates reduction.

The VN-Index of Ho Chi Minh Stock Exchange (HoSE) ended 4.09 points down or 0.95 per cent lower at 428.02 points, after falling nearly 10 points in the morning.

The rebound came after State Bank announced it would reduce key interest rates by 1 per cent each from March 13. The central bank had said last week it would soon reduce the rates.

Selling pressures from investors locking in profits eased significantly. Bidding for shares increased for a number of major stocks, helping some stocks end the day higher. Overall, 60 stocks gained, 53 ended flat and 197 declined in value.

Sacombank (STB) significantly rebounded to VND20,300, up 4.1 per cent with 7.2 million shares matched.

Pillar stock Bao Viet Holdings (BVH) advanced 4.24 per cent, strongly supporting the market. Vinamilk (VNM) also rose.

Afternoon liquidity was also up on morning liquidity, reaching 74 million shares worth VND1.15 trillion ($5.56 million). But the figure was significantly down on last session.

Many major stocks were weighed down by pressure to lock in profits. Tan Tao Investment Industry Corp. (ITA), Licogi 16 (LCG), Investment and Trading Of Real Estate (ITC), Hoang Anh Gia Lai (HAG), PetroVietnam Finance (PVF), Vietinbank (CTG) all hit the floor.

Banking stocks also saw sharp losses with Military Bank (MBB) and Vietcombank (VCB) sliding nearly 4 per cent each on HoSE while Habubank (HBB) hit the floor with nearly 14 million shares still being offered at floor price after the session’s close. Saigon-Hanoi Bank (SHB) hit the floor as well.

The VN30 slipped 4.38 points or 0.9 per cent to 482.65 points.

Demand for shares also weakened today on the Hanoi Stock Exchange (HNX). Liquidity strongly fell to 59 million shares worth VND552 billion ($22.7 million).

As with the HoSE, HNX saw many leading stocks hit the floor or come close to doing so. Up to 207 stocks declined on the northern bourse, compared with 82 advancing and 106 unchanged.
The HNX-Index lost 2.3 points or 3.21 per cent, closing at 69.26 points.