Vietnam’s stock market plummets for second consecutive day, loses $9.55 bln

By Ngan Anh   February 5, 2018 | 09:13 pm PT
Vietnam’s stock market plummets for second consecutive day, loses $9.55 bln
Total market capitalization of Vietnam's stock exchange lost VND218 trillion ($9.55 billion) on Tuesday. Photo by VnExpress
The benchmark VN-Index tumbled nearly 6 percent just 15 minutes after opening on Tuesday.

Vietnam’s stock market recorded its steepest fall in nearly two and a half years on Tuesday with investors worried that the U.S Federal Reserve will raise interest rates.

Just 15 minutes after opening, the benchmark VN-Index on the Ho Chi Minh Stock Exchange (HOSE) tumbled nearly 6 percent to 966.41 points.

The smaller HNX-Index on the Hanoi Stock Exchange also dipped nearly 6 percent to 112 points.

Over 25 percent of the 400 shares listed on the market fell on Tuesday morning, while total market capitalization dropped by VND218 trillion ($9.55 billion) as of 9:40 a.m. from the previous day.

Experts said the stock market plunged on Monday and Tuesday after the prospect of higher interest rates rattled equity investors.

The Fed, which raised rates three times last year and in December forecast three more hikes for this year, said it expected “further gradual” rate increases will be warranted. The target range for the federal funds rate currently is 1.25 to 1.50 percent, according to Reuters.

Experts said that a tendency to sell shares before the Lunar New Year festival, Vietnam's biggest holiday which will start on February 15, has affected the country's stock market.

In addition, sharp growth in 2017 and January is also another reason for the steep decline, analysts said.

Blue chips held by both local and foreign investors are being sold en masse now, driving down the entire market.

The decline is expected to last until a few weeks after Tet, analysts said.

Some securities firms have warned investors about getting into the market now due to high risks.

The plummet in global stock markets has raised gold prices. In the U.S market, gold increased 0.5 percent to $1,338 per ounce on Monday. 

In the local market, gold prices increased by 0.3 percent to VND36.8-36.9 million ($1,639-1,644) per tael on Tuesday morning. Each tael is equivalent to 1.2 ounces.

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