Stocks Plunge on no Supportive News

The benchmark VN-Index today lost 5 points or 1.08 per cent to 454.32 with volume improved slightly to 28.58 million shares worth VND686.05 billion ($35 million) traded, compared to 23.7 million shares worth VND638.5 billion ($32.7 million) on October 11, the lowest level for eighth months.

HNX closed lower by 1.45 point, or 1.2 per cent lower to 119.81 points with 23.2 million shares and VND526 billion ($26.9 million) changed hands, up slightly from 18.5 million shares and VND435 billion ($22.3 million) on previous day.

Trading volumes rose but still at a low level, money flows were weak on fragile sentiment. There is no supportive news today to stimulate markets. Local banks are still in the race to hike their charter capital to at least VND3 trillion prior to year-end, which remains the obstacle for a market rally.

Pham Thanh Binh, PetroVietnam Securities Incorporated (PSI) chief analyst, said that good news had been announced and there was no good news ahead. “The bearish sentiment could last for several weeks,” said Binh, adding that the market would move at 440-469 point range for the time being.

The market opened in the red and went further south towards the end of the trading session. On the HoSE, 184 stocks fell, 30 gained and 52 were unchanged. Most blue-chips fell except for financial BVH and milk producer VNM, holding at reference prices. Only securities stock AGR hit the 5 per cent daily limits.

Banking stock STB was the most active stock with 1.01 million shares traded, closing lower at VND16,500. OGC ranked second in the list with 0.97 million shares traded, sliding 0.66 per cent to VND29,900. ITC was in the third place with 0.72 million shares traded, losing 2.69 per cent to VND21,700.

Sacombank Securities (SBS) analysts said that as the market trend had not been formed, short-term investors were under pressures to dump stocks to cut loss.

“As there is no new money and no supportive macro-economic news, the market is likely to fall further,” said SBS analysts.

On the HNX, the market recorded 51 gainers, 238 losers and 55 unchanged stocks. Financial PVX was the most active stocks on the northern bourse with 1.40 million shares traded, falling 1.35 per cent to VND21,900. Brokerage KLS ranked second with 1.07 million shares traded, sliding 0.71 per cent to VND14,000. Construction giant VCG was in the third place with 0.73 million shares traded, falling 2.03 per cent to VND24,100.

Le Anh Thi, Au Viet Securities Company’s investment director, said that when the market liquidity fell and cautious market sentiment dominated, indicating that the market was near the bottom line.

“Medium to long-term investors can selectively accumulate stocks at market dips and do not use financial leveraging at this time,” AVSC analysts said.