Several new Government policies, including tax relief for low earners and a new ceiling on deposit interest rates, began from on July 1 but shares still took a dive on the country's both stock exchanges.

The threshold for paying income tax has risen from 4 million VND (190 USD) to 9 million VND (428.5 USD) per month.

The cap on the deposit interest rate will be reduced to 7 percent.

Despite such supportive policies, the recent downturn on the stock market has made investors extra cautious.

The decline slowed on the HCM City exchange in the afternoon with the benchmark VN-Index sliding just 0.23 percent to 480.04 points.

The strong recovery of a few heavyweight shares, including Masan Group (MSN) and PV Gas (GAS), cushioned the index fall. Both rose nearly 3 percent on July 1.

The market condition was still negative, however, as losers outnumbered gainers by 133-72 while 101 codes were unmoved.

The VN30, which tracks the top 30 shares on the bourse, was down by 0.69 percent to 534.85 points. Trading was the two-month low at 35 million shares, worth nearly 500 billion VND (23.8 million USD), by the end of the session.

Property giant Hoang Anh Gia Lai Group (HAG) remained the most active with 2.35 million changing hands for 20,400 VND (0.97 USD) each, down 1.45 percent from the previous closing price.

On the Hanoi Stock Exchange, the HNX-Index also slipped 0.43 percent to close at 62.49 points with nearly 16.7 million shares worth just 130.4 billion VND (6.2 million USD) being traded.

Investment FLC Group was the most heavily traded stock nationwide with over 3.8 million shares changing hands for 6,400 VND a share.

Overseas investors were still net sellers on the HCM City market of 19.2 billion VND (914,300 USD) worth of shares, but they were net buyers of about 8.3 billion VND (395,200 USD) worth of shares on the Hanoi market.-VNA