Vietnamese stocks down, led by banks hinh anh 1Illustrative image (Source: VNA)
Hanoi (VNA) – Vietnamese shares retreated on February 2 from gains on January 29 on both local markets as fears that the Vietnamese dong may weaker hurt financial firms.

The benchmark VN Index on the HCM Stock Exchange dropped 0.9 percent to close at 540.56 points and the HNX Index on the Hanoi Stock Exchange fell 0.8 percent to end at 76.24 points.

The financial sector declined after Chinese industrial production in January slowed to its lowest pace in almost three-and-a-half years, suggesting the country could further weaken its currency and provide more policy easing to help its economy.

A weaker Chinese yuan will put pressure on the Vietnamese dong, pushing Vietnam's central bank to consider weaken its currency in order to assure local products stay competitive in overseas markets.

On February, Vietnam's central bank raised the reference mid-point rate for its exchange trading band by 11 VND to 21,892 VND per US dollar with 3 percent limit on either side of the mid-point rate for local banks to decide their exchange prices.

The indices for banks, insurance firms and brokerage companies fell 1.5 percent, 1.8 percent and 1 percent, respectively.

Among banks, Vietcombank (VCB) lost 1.7 percent, the Bank for Investment and Development of Viet Nam (BID) slumped 3 percent, and Saigon-Hanoi Bank (SHB) dropped 1.5 percent.

Other financial companies such as insurer Bao Viet Holdings (BVH), brokerage firm Saigon Securities Incorporation (SSI) and VNDirect Securities Corporation (VND) slipped 2 percent, 1 percent and 2.6 percent, respectively.

Meanwhile, the energy sector index dropped 1.3 percent on February 1 as global oil prices declined after the Organisation of Petroleum Exporting Countries (OPEC) said it produced more than 33 million barrels a day in January, the highest volume in the last six years.

US benchmark crude West Texas Intermediate (WTI) lost 1.6 percent to trade at 33.08 USD a barrel after it had gained 11 percent during the previous four sessions.

London-traded Brent crude was down 0.6 percent to trade at 35.77 USD a barrel. It had risen 14 percent in the previous four sessions.

Among energy stocks, PetroVietnam Gas Corporation (GAS) on February 1 fell 4.3 percent, PetroVietnam Technical Services Corporation (PVS) dropped 4.6 percent, and PetroVietnam Mud Drilling Corporation (PVC) lost 2.1 percent.

GAS had surged one-third in the previous six sessions, while PVS had risen 14.6 percent and PVC had jumped a fourth.

Both markets traded more than 143 million shares worth 2.1 trillion VND (94 million USD), a decrease of 12 percent from last week's daily trading value.-VNA