The benchmark VN Index on the HCM Stock Exchange dropped 1.3 per cent to close at 553.03 points. — VNS Photo Gia Vi

HA NOI (Biz Hub) — Vietnamese shares fell sharply on both local exchanges yesterday amid above average trading volume as a global stock market rout unnerved investors.

The benchmark VN Index on the HCM Stock Exchange dropped 1.3 per cent to close at 553.03 points and extended a two-day loss to 2 per cent. The HNX Index on the Ha Noi Stock Exchange lost 1.2 per cent to end at 75.71 points.

Investor confidence in Viet Nam was undermined by another drop in Asian stocks yesterday which came on the heels of a plunge in US stocks and crude prices remaining near twelve-year lows, Sai Gon-Ha Noi Securities Corporation (SHS) wrote in a report.

The US benchmark crude West Texas Intermediate (WTI) yesterday traded at US$30.55 a barrel, an increase of 0.4 per cent from a twelve-year low, while London-traded Brent crude fell another 0.9 per cent to trade at nearly $30.05 a barrel.

SHS said that some investors showed signs of panic selling, informing their brokers to get them out of positions no matter the price.

Yesterday's decliners were led by financial and energy stocks.

Among financial firms, insurer Bao Viet Holdings (BVH) fell 3.9 per cent, Vietcombank (VCB) lost 1.2 per cent, and the Bank for Investment and Development of Vietnam (BID) slumped 2.6 per cent.

Other stocks that also pulled the markets down included software supplier FPT Corporation (FPT), which was down 0.4 per cent, and food and beverage producer Masan Group (MSN), which dropped 1.3 per cent.

In addition, leading plastic companies declined after two-day gains. Tien Phong Plastic JSC (NTP) fell 3.1 per cent after rising 2.2 per cent, and Binh Minh Plastic JSC (BMP) lost 1.6 per cent after gaining 4.1 per cent.

Viet Nam's central bank yesterday lowered the reference mid-point in its US dollar trading band by VND2 to VND21,907 a dollar. However, local banks weakened the dong by VND15 to VND30 a dollar to trade at VND22,470 to VND22,480.

The stock markets traded more than 195.5 million shares worth more than VND2.7 trillion ($122 million), an increase of 12 per cent from Wednesday's trading value and above 2015's daily average of VND 2.5 trillion. — VNS