VN stocks recover amid China stimulus hopes

Staff follow transactions at Bao Viet Securities Company in Ha Noi. - VNS Photo Truong Vi

The benchmark VN Index on the HCM Stock Exchange gained 1.8 per cent to close at 535.77 points after a four-day loss of 6.7 per cent.

The HNX Index on the Ha Noi Stock Exchange rose 1.4 per cent to end at 74.30 points. The northern index had lost 4.4 per cent in the previous three sessions.

China announced yesterday that its gross domestic product expanded 6.8 per cent in the fourth quarter, the lowest growth rate since 2009. Equities in Shanghai and Shenzhen jumped more than 3 per cent yesterday as investors bet the Chinese government will implement fresh public spending and other measures to fuel growth.

China is Viet Nam's largest trade partner and sharp moves in its stocks and currency often reverberate in local markets.

The recent drop in markets had also made stock prices more attractive, Sai Gon-Ha Noi Securities (SHS) wrote in its report.

Large-cap stocks, including banks and insurance firms, benefited the most from higher investor confidence. The banking sector index and the insurance sector index jumped 3.3 per cent and 3.8 per cent, respectively.

Among banks, Vietcombank (VCB) gained 4.4 per cent after having fallen 13 per cent since the end of last year, Vietinbank (CTG) rose 3.6 per cent after dropping 6.5 per cent, and the Bank for Investment and Development of Viet Nam (BID) climbed 3 per cent after losing 18 per cent.

The insurance sector was lifted by Bao Viet Holdings (BVH), which surged 5 per cent, and PVI Holdings (PVI), which jumped 3.5 per cent. BVH had lost 11.3 per cent since the end of last year and PVI had dropped 9.7 per cent.

Rising demand for cheaper stocks also helped boost other sectors such as the property sector, the food and beverage sector and the information technology sector.

The gains in these sectors were led by food and beverage firm Masan Group (MSN), which was up 1.4 per cent, property developer FLC Group (FLC), which jumped 4.8 per cent and software provider FPT Corporation (FPT), which gained 0.5 per cent.

Yesterday, Viet Nam's central bank cut its reference mid-point rate for US dollar exchange trading band by VND7 to VND21,906. The bank allows investors to trade the dollar up to 3 per cent on either side of the mid-point. On the unofficial exchange market, one dollar was traded for VND22,520.

Meanwhile, crude oil prices were rebounding from their twelve-year lows. US benchmark crude West Texas Intermediate (WTI) gained 1.3 per cent to trade at US$29.80 a barrel while London-traded Brent crude rose 3.8 per cent to trade at $29.63 a barrel.

The stock markets traded more than 164 million shares worth nearly VND2 trillion ($88.3 million), a decrease of more than one-third from Monday's trading value.