Petrol prices rising to record highs on Feb. 24 morning sent stocks into a nosedive on both national stock exchanges.

The price of petrol set as of 10am on Feb. 24 was set at 19,300 VND per litre – a whopping 18 percent increase and the steepest one-day increase since 2008.

"The hike in petrol prices was forseeable," said Nguyen Huu Hao, the chief broker at a HCM City-based securities company. "It was a necessary consequence of the change in the foreign exchange rate. But coming unexpectedly soon had an impact on securities trading."

Previous word from the Government that it would use the petrol price stabilisation fund to compensate petrol wholesalers for losses, and the decision that electricity rates would increase in March had left many under the impression that petrol prices also wouldn't go up until March at the soonest, Hao said.

Minister of Finance Vu Van Ninh said on Feb. 24 that increasing the petrol price to 19,300 VND per litre was only about 44 percent of the increase the ministry needed to make. A 17.7-percent increase, he said, should cause March inflation to increase by 1.03 percent.

The market was already labouring under the news of sky-high inflation during February, as well as word that the trade deficity had climbed to 960 million USD, said Dang Anh, an analyst with financial service provider Stoxplus Corporation.

On the HCM Stock Exchange on Feb. 24, the VN-Index reacted to the heavy burden of bad news by dropping nearly 2 percent from Wednesday's close. The VN-Index finished the session at 461.29 points.

The volume of trades rose by 16.8 percent over the previous day to just over 43 million shares, worth a total of 974.4 billion VND (44.9 million USD).

About 30 shares plummeted to their floor prices, including insurer Bao Viet Holdings (BVH), conglomerate Masan Group (MSN), PetroVietnam Drilling (PVD) and Tu Liem Urban Development Co (NTL), while Dong Phu Rubber Co (DPR) closed down 4.5 percent and Cotec Construction Co (CTD) lost 4.2 percent.

Real estate developer Vincom (VIC) was the only blue chip to buck the loss trend, closing up 1.9 percent.

On the Hanoi Stock Exchange, the HNX-Index slid by 1.35 percent to 95.64 points, well below its original reference mark of 100.

Trading continued brisk at 34.8 million shares, worth 548.6 billion VND (25.3 million USD). Some bottom-catching in the final minutes brought a small influx of capital and save the northern market from heavier losses.

Foreign investors returned to being net buyers on Feb. 24, picking up a combined net of over 900,000 shares on both markets./.