Shares nosedive on new virus cases, fears of another outbreak

Tuesday, Jul 28, 2020 06:47

A BIDV teller wears a mask. The bank's shares hit the daily limit decline of 7 per cent on Monday. — Photo courtesy of BIDV

Vietnamese shares suffered their biggest daily percentage drop in four months as new COVID-19 cases highlighted continued risks posed by the pandemic and dimmed the prospect of a swift economic recovery.

Two new cases of COVID-19 community transmission were confirmed in Da Nang and nearby Quang Ngai Province on Sunday evening.

This takes the country’s tally to 420 and the number of active cases to 55.

The latest infections also raise the number of community transmissions in the past few days to four, the first of which broke Viet Nam's 99-day streak with no community transmission of the novel coronavirus.

The VN-Index on the Ho Chi Minh Stock Exchange lost 5.31 per cent to close Monday trading session at 785.17 points.

A total of 422.7 million shares worth VND7 trillion (US$305.3 million) were traded on the southern bourse.

Market breadth was negative with the number of decliners ten fold that of gainers by 377 to 33.

The latest infection cases in Da Nang remind investors of the same market move in early March when the 17th COVID-19 patient was reported in Ha Noi.

On March 6, the 17th COVID-19 case was reported and the VN-Index plunged 6.28 per cent in the next trading day on March 9.

The large-cap VN30-Index, tracking the performance of the 30 largest stocks by market capitalisation and liquidity on HoSE, slumped 5.48 per cent to 729.93 points.

All 30 stocks in the VN-30 basket lost ground, half of them even hit the floor prices, such as Bank for Investment and Development of Viet Nam (BID), insurer Bao Viet Holdings (BVH), Vietinbank (CTG), HDBank (HDB), Military Bank (MBB), Mobile World Group (MWG), Phu Nhuan Jewelry (PNJ), SSI Securities Co (SSI), Techcombank (TCB) and dairy firm Vinamilk (VNM).

On a sector basis, all 25 sectors on the stock market decreased, including insurance, securities, banking, real estate, retail, agriculture, information and technology, food and beverage, healthcare, mining, rubber production, seafood processing, logistics, construction and construction materials.

Those sector indexes declined between 1.5 and 6.7 per cent.

New infection cases intensified fears of another round of government restrictions and worsening economic damage.

Thanh Cong Securities said the sell-off pressure continued to weigh on most stocks amid the sudden re-emergence of the COVID-19 transmissions in the community.

The company forecast that VN-Index would continue to follow negative trend at the beginning of the next trading session.

“However, it is likely that there will be a slight recovery as the massive sell-off will trigger the bottom fishing cash flow looking for down-beaten stocks. Technically, VN-Index may be supported at the 750-point area,” the company said.

On the Ha Noi Stock Exchange, the HNX-Index also plunged 5.93 per cent to end at 102.85 points.

Nearly 68 million shares were traded on the northern exchange, worth VND630 billion. — VNS


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