Selling, oil prices take down local stocks

Thursday, May 28, 2020 00:08

Vietnamese oil rigs on the waters off Ba Ria-Vung Tau Province. The energy sector weighed on the local stock market on Wednesday due to lower oil futures. — VNA/VNS Photo Huy Hung

Local shares fell on Wednesday as lower oil futures and increased profit-taking hit major indices.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange dropped 1.34 per cent to close at 857.48 points.

The VN-Index had advanced a total of 1.92 per cent in the first two trading days of the week.

The minor HNX-Index on the Ha Noi Stock Exchange fell 1.45 per cent to end at 108.89 points.

The northern market index stepped down from a three-day growth of 4.49 per cent.

More than 454 million shares were traded on the two exchanges, worth VND7.42 trillion (US$318.4 million).

The Vietnamese stock market quickly headed down after the VN-Index touched the daily peak of 875 points.

Profit-taking escalated and sent stocks, especially large-caps, down in the afternoon session.

The large-cap tracker VN30-Index fell 1.67 per cent with 21 of the 30 largest stocks by market value and trading liquidity ending on a negative note.

Among the worst decliners were Bank for Investment and Development of Vietnam (BID), VPBank (VPB), steel producer Hoa Phat (HPG), real estate firm Vincom Retail (VRE), Vietinbank (CTG) and insurer Bao Viet Holdings (BVH),

Those large-caps tumbled between 2.9 per cent and 5.2 per cent.

A drop in crude prices also dampened market confidence.

US crude futures West Texas Intermediate (WTI) lost 1.3 per cent and Brent futures dipped 1.6 per cent to trade at $33.9 and $35.6 a barrel.

Oil and gas services suppliers such as PetroVietnam Drilling and Well Services (PVD), PetroVietnam Technical Services (PVS) and PetroVietnam Coating (PVB) plunged between 1.5 per cent and 3.1 per cent.

The market lost steam as selling pressure arose when the VN-Index was approaching the 880-point level, Sai Gon-Ha Noi Securities (SHS) said in its daily report.

“The recovery of the market has probably ended and stocks will have to fall to their short-term support levels where they are cheap enough to trigger investors’ buy-in,” SHS said.

The gap between the VN30 futures and its underlying asset VN30-Index enlarged on Wednesday after the former lost 26.5 points and the latter dropped only 13.65 points.

“The bigger gap between the VN30-Index and its VN30 futures shows investors are betting the market will keep falling in the coming day.”

The VN-Index is forecast to struggle between 840 points and 880 points on Thursday. — VNS

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