The VN Index on the HCM Stock Exchange was down 0.5 per cent to close on Friday at 571.62 points. The southern index fell 1.9 per cent over the week and 6.7 per cent over the past four weeks. — Photo Doan Tung

HA NOI (Biz Hub) — The national stock market may extend its losses during early trading this week ahead of the US central bank's December meeting, Maritime Securities Incorporate (MSI) wrote in a weekly forecast.

MSI said Viet Nam's benchmark VN Index would fall to between 565 and 566 points early in the week amid fears the US central bank would raise interest rates, hurting dollar-dominated investments in Viet Nam.

The VN Index on the HCM Stock Exchange was down 0.5 per cent to close on Friday at 571.62 points. The southern index fell 1.9 per cent over the week and 6.7 per cent over the past four weeks.

The HNX Index on the Ha Noi Stock Exchange inched up 0.1 per cent on Friday to end at 80.14 points. The northern index dropped 1.7 per cent from the previous week and has also lost 1.7 per cent over the last four weeks.

In fact, the US dollar fell against the euro and the Japanese yen after the European Central Bank (ECB) cut another 10 basis points to set its deposit rate to negative 0.3 per cent last week.

Viet Nam's central bank has yet to issue any decisions on the country's foreign exchange policy following the ECB's move.

An interest rate hike made by the US central bank would boost the US dollar on the global monetary market, making it stronger than the Vietnamese dong and putting pressure on Viet Nam's monetary policy.

Local bank stocks, especially the likes of Vietcombank (VCB), the Bank for Investment and Development of Viet Nam (BID) and Sacombank (STB) would likely extend their losses this week as an interest rate hike would devalue the dong and hurt their profits.

Last week, VCB dropped 4.5 per cent, BID fell 2.3 per cent and STB declined by 2.6 per cent from the previous week.

Local energy firms are also likely to suffer this week after OPEC on Friday announced it will maintain the current production output for oil until June.

Global oil prices declined on Friday. The US benchmark crude West Texas Intermediate (WTI) fell sharply by 2.7 per cent to trade at US$39.97 a barrel and the Euro-based crude Brent lost 1.9 per cent to trade at $43 a barrel.

The decline of global oil prices will hurt the profitability of local energy firms such as PetroVietnam Gas Corporation (GAS), PetroVietnam Drilling & Well Services Corporation (PVD) and PetroVietnam Technical Services (PVS).

Last week, the national stock market traded an average 155 million shares per day worth VND2.3 trillion ($102 million), an increase of 29.5 per cent in volume and 23 per cent in value compared to the previous week. — VNS