The stock market rebounded strongly on Wednesday, lifted by a regulatory interest rate cut by the State Bank of Vietnam (SBV).
The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) soared by 22.06 points, or 2.12 per cent, to 1,062.19 points.
The recovery session snapped the index’s three-day losing streak and was its biggest one-day percentage gain in nearly a month.
The breadth of the market returned to positive territory with gainers outnumbering of losers on the southern bourse.
Liquidity was slightly higher than the previous session with nearly VND10.7 trillion (US$453 million) worth of shares, equivalent to a trading volume of nearly 623 million, traded on HoSE.
The VN30-Index also jumped 27.03 points, or 2.61 per cent, to 1,064.38 points.
Twenty-seven of the 30 biggest stocks in the VN30 basket advanced, with one hitting the biggest intraday gain of 7 per cent, and three stocks finished lower.
On the Ha Noi Stock Exchange (HNX), the northern market’s benchmark HNX-Index closed the trading day at 207.01 points, an increase of 4.46 points, or 2.2 per cent.
Investors poured nearly VND1.2 trillion into the exchange, approximating a trading volume of more than 82.4 million shares.
The market’s reversal was driven by the improvement in investors’ cautious sentiment after the central bank announced a trim to regulatory interest rates on Tuesday afternoon.
SBV has decided to cut regulatory interest rates by 0.5 to 1 per cent from March 15.
According to the SBV's decision issued on Tuesday, the rediscount interest rate is lowered to 3.5 per cent from 4.5 per cent per annum, while overnight lending rates in interbank electronic payments and loans to cover capital shortfalls in clearing payments of the SBV for credit institutions are cut from 7 per cent per annum to 6 per cent.
Statistics showed that BIDV (BID) was the market’s leader on Wednesday with a gain of 3.88 per cent in market capitalisation. It was followed by Hoa Phat Group (HPG), up 4.93 per cent, Vinhomes (VHM), up 2.79 per cent, and Vingroup (VIC) rose by 1.89 per cent.
Securities stocks also performed well, with SSI Securities Corporation (SSI), Ho Chi Minh Securities Corporation (HCM), Viet Capital Securities JSC (VCI), VNDirect Securities Corporation (VND), and VIX Securities JSC (VIX) all posting the maximum daily gain of 7 per cent.
Also supporting the market, foreign investors continued to be net buyers on both main exchanges. They bought a net value of VND219.94 billion on HoSE and VND29.11 billion on HNX.
In global markets, Asia shares ticked up, tracking Tuesday’s rebound on Wall Street after US inflation data suggested a smaller rate hike from the US Federal Reserve when it meets next week. VNS