A strong rebound by blue chips on the two national stock exchanges on May 20 rescued the market from the threat of a prolonged downtrend, with indices soaring after several sessions of steep declines.

On the HCM Stock Exchange, the VN-Index rose 1.75 percent and poked its nose back above the 500-mark, ending the day's trades at 503.55 points.

Nearly 58.8 million shares changed hands, worth a combined 1.88 trillion VND (98.9 million USD).

The southern market opened negatively on weak buys, however, and the VN-Index fell below 490 at one point. However, a rising demand for blue chips lifted the market in the final minutes before the closing bell.

Gainers outnumbered losers by 145-46, with Sacombank (STB) claiming the position as the most-active share on a volume of 4.27 million. STB, Saigon Securities Inc (SSI) and Phu My Fertilisers (DPM) closed at their ceiling prices while such blue chips as FPT, Hoang Anh Gia Lai Co (HAG), PetroVietnam Drilling (PVD) and Hoa Phat Group (HPG) all posted substantial gains.

On the Hanoi Stock Exchange, the HNX-Index also added 1.78 percent to close at 163.36 points. Volume improved to a total of 54.5 million shares, up 35 percent from the previous day's trades, for a combined value of 1.67 trillion VND (87.9 million USD).

Over 60 percent of codes saw their prices increase, particularly those of securities companies like Kim Long Securities (KLS), Bao Viet Securities (BVS), Sai Gon-Hanoi Securities (SHS), Vietnam Industrial and Commercial Securities (VIG), Au Viet Securities (AVC) and Hai Phong Securities (HPC).

The Hanoi market welcomed two new listings, bringing the total number of listed companies to 294. Da Lat Real Estate Co (DLR) closed its first day of trading at 33,000 VND (1.75 USD) per share on a volume of 25,300 while 565 Construction Co (NSN) closed at 18,200 VND (0.96 USD) with 53,800 traded.

May 20's rebound surprised many investors who had anticipated a deeper correction, said independent stock analyst Pham Viet Hung, citing the deep decline at the opening and the pressure many investors were feeling to sell shares to service loans.

"However, investors returned to buy on a first sign of a rally, hoping to grab cheaper prices," Hung said.

While the rebound couldn't confirm a new market rally, it was likely to reignite investor confidence in brighter market prospects, FPT Securities Co analysts wrote in a report on May 20.

Foreign investors returned to being net buyers on both bourses, responsible for a combined net buy of nearly 900,000 shares, worth a net of 43 billion VND (2.3 million USD)./.