The benchmark VN Index on the HCM Stock Exchange on Friday gained 0.3 per cent to close last week's trading at 572.08 points. — VNS Photo Truong Vi

HA NOI (Biz Hub) — The nation's stock markets may decline this week as investor confidence remains low due to a possible rate hike by the US central bank and volatile oil prices, securities companies warned.

The stock markets may also retreat on bad news about macroeconomics released by the Government last week that revealed signs of economic slowdown, including a GDP growth of 5.5 per cent in the first quarter, lower than the growth of 6.1 per cent recorded last year, Maritime Securities Corporation (MSI) said.

Meanwhile, the benchmark VN Index on the HCM Stock Exchange on Friday gained 0.3 per cent to close last week's trading at 572.08 points. The southern index fell 0.6 per cent from the previous week.

The HNX Index on the Ha Noi Stock Exchange fell 0.6 per cent to finish the week at 79.73 points, extending a two-day decline of 1 per cent. The northern index dropped 1.1 per cent over the week.

Low investor confidence may drive markets down, especially after analysts pointed out that the US central bank may tighten its credit after statistics showed that the US economy recovered in the fourth quarter of last year, which was better than expected.

Better economic statistics announced by the US Government helped the US dollar rise against other currencies, including the Vietnamese dong, and it will become stronger if the US central bank raised its interest rates at the end of next month.

A stronger dollar on the international financial market may force Viet Nam's central bank to weaken the dong in order to protect local products and attract foreign investment to the country.

Last week, Viet Nam's central bank raised its reference mid-point rate for exchange trading by VND41 to VND21,879 per dollar.

Low investor confidence put pressure on financial firms, such as banks, insurance companies and securities corporations, as their businesses depends upon on the flow of dollar-based trading.

Banks that declined during the week included the Bank for Investment and Development of Viet Nam (BID), Vietinbank (CTG) and the Asia Commercial Bank (ACB), which fell 1.7 per cent, 2.3 per cent and 1.6 per cent, respectively.

Among other financial stocks, insurer Bao Viet Holdings (BVH) dropped 1.9 per cent from the previous week, Sai Gon Securities Incorporation (SSI) lost 1.8 per cent and HCM City Securities Corporation (HCM) slumped 4.3 per cent.

In addition, investor confidence may become worse as oil prices showed some volatility last week after the US Government reported increasing stockpiles amid the global glut, while other crude exporters chose not to join the coalition led by Russia and Saudi Arabia on production cuts to boost prices.

US benchmark crude West Texas Intermediate (WTI) dropped 0.8 per cent on Thursday to close trading at US$39.46 per barrel, extending a two-day slump of 4.8 per cent. WTI ended slightly higher from the previous week of $39.44 per barrel.

Among local energy stocks, PetroVietnam Gas Corporation (GAS) fell 2.2 per cent during the week, PetroVietnam Technical Service Corporation (PVS) dropped 2.9 per cent and PetroVietnam Mud Drilling Corporation (PVC) slipped 8.4 per cent.

Both local markets last week traded nearly 212 million shares each day, worth nearly VND3 trillion ($132.3 million), a decrease of 7.8 per cent in trading volume and 23 per cent in trading value from the previous week. — VNS