Vietnam’s stocks fall amid Fed fears
Vietnamese shares fell on both local bourses on January 28 as investors worried that a possible US central bank interest rate hike in March could help weaken the local currency.
A securities trading floor (Source :VNA)The benchmark VN Index on the HCM Stock Exchange fell 0.6 percent to close at 539.47 points and the HNX Index on the Hanoi Stock Exchange inched down 0.1 percent to end at 76.16 points.
Investor confidence faltered after the US central bank signaled after a meeting that it could hike interest rates in March on expectations that global economic conditions will improve and the recent slowdown of global stock markets is temporary.
Investors, eyeing the recent sharp drops in the Chinese and US stock markets, are concerned the US Federal Reserve may raise rates too quickly.
Banks and brokerage firms retreated from Wednesday gains. The brokerage sector index dropped 0.7 percent, led by Sai Gon Securities Incorporation (SSI) and HCM City Securities Corporation (HCM), which fell 1 percent and 1.4 percent, respectively.
The banking sector index was down 1 percent, led by the Bank for Investment and Development of Vietnam (BID) and Vietinbank (CTG), which slumped 4.1 percent and 1.7 percent. These two banks had also gained 15 percent and 8.7 percent during the three previous sessions.
However, the Fed will likely take a cautious approach to raising rates, which should keep Vietnam's foreign exchange rate stable, Sai Gon-Hanoi Securities Corp. wrote in a report.
Vietnam's central bank on January 28 reduced the reference rate for its exchange trading band by 7 to 21,886 VND a US dollar, bringing the rate to below 21,890 VND for the first time since the bank started adjusting the rate on a daily basis starting January 4.
The energy sector index yesterday dropped 0.9 percent, led by PetroVietnam Mud Drilling Corporation (PVC), PetroVietnam Technical Services Corporation (PVS) and Petroleum Equipment Assembly & Metal Structure JSC (PXS), which fell 0.8 percent, 2.7 percent and 0.9 percent, respectively.
Both local markets traded nearly 160 million shares worth 2.3 trillion VND (101 million USD), a slight increase from the previous day's trading value but still lower than last year's daily trading value of 111 million USD.-VNA
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