Oil prices help VN stocks rebound

Investors work on the Sai Gon Securities Inc's trading floor. The VN Index yesterday bounced 0.7 per cent from a two-day loss of 0.5 per cent.-VNS Photo Doan Tung

The benchmark VN Index on the HCM Stock Exchange rebounded 0.7 per cent to finish at 624.65 points, erasing a loss of 0.5 per cent made in the previous two sessions.

The HNX Index on the Ha Noi Stock Exchange bounced back 0.7 per cent from a small backward step on Monday to close at 83.19 points.

Energy stocks rose for a second day as global oil prices held near 10-month highs on expectations that US stockpiles are declining and the market is reaching a point of rebalance, amid a positive plan announced by Saudi Arabia to reduce its economy's reliance on oil production.

US crude West Texas Intermediate (WTI) added 0.5 per cent to trade at US$49.94 a barrel, rising 2.7 per cent in the last two trading days. London-traded Brent crude was up 0.6 per cent to trade at $50.86 a barrel, having climbed a total 2.5 per cent in two sessions.

The increasing oil prices helped energy stocks make good gains, including PetroVietnam Gas Corp (GAS), PetroVietnam Drilling and Well Service Corp (PVD), PetroVietnam Technical Services Corp (PVS) and PetroVietnam Coating Corp (PVB), whose gains ranged between 1.7 per cent and 2.7 per cent.

Additionally, investor confidence improved as analysts were optimistic that the US central bank will not increase its interest rates in June and July, given the disappointing US economic data published late last week.

That expectation has weakened the US dollar on global exchange markets and helped Viet Nam's central bank cut its daily reference mid-point rate by VND18 to VND21,896 for a dollar. The mid-point rate has dropped sharply by VND43 in the past two days.

Higher investor confidence lifted leading businesses such as property developers, rubber and plastic producers, steel companies and food and beverage firms.

In the property sector, Vingroup JSC (VIC), Kinh Bac City Development Share Holding Corp (KBC), FLC Group (FLC) and Sai Gon Thuong Tin Real Estate JSC (SCR) were among the strongest gainers.

Steel producers such as Hoa Phat Group (HPG), Hoa Sen Group (HSG) and Vietnam-Italy Steel JSC (VIS) advanced between 1 per cent and 2.5 per cent.

A stronger Vietnamese dong made local stocks attractive to foreign investors. Yesterday, foreign investors recorded a net buying value of VND104.2 billion ($4.63 million) in both local exchanges.

Both local exchanges traded 117.3 million shares worth VND2.55 trillion, a decrease of 10 per cent from Monday's trading value.