Vietnamese shares fell yesterday after two consecutive rising sessions as investors worried about a potential trade war between China and the US, which shook global markets.

The benchmark VN-Index on the HCM Stock Exchange dropped 0.76 per cent to close at 983.02 points, ending its two-day growth of total 2.17 per cent.

The HNX Index on the Ha Noi Stock Exchange lost 0.96 per cent to end at 110.92 points. It had gained total 1.66 per cent in the previous two trading days.

More than 192.5 million shares were traded on the two local exchanges, worth VND4 trillion (US$179 million), up 12 per cent in volume and 6.1 per cent in value compared to the previous session.

Market breadth was negative with 154 gaining stocks, 249 declining stocks and 139 other stocks closing unchanged.

According to BIDV Securities Co (BSC), local stocks suffered a “psychological impact from the world market” after global stocks slid on US-China trade war fears which has spread from export-import firms to technology developers.

Though it is too soon for the confirmation of a comprehensive trade war between the two biggest economies in the context of escalating tension, “the level of instability and concerns about global stock markets has certainly continued to increase in the short term” and “this factor remains an unpredictable risk for Viet Nam’s stock market,” Bao Viet Securities Co (BVSC) said in its daily report.

Poor investor confidence hit a majority of 20 sectors yesterday. Among declining industries were insurance-finance firms, energy, banks and consumer staple producers.

Large-cap stocks also performed badly with 26 of the 30 largest stocks by market capitalisation ending in negative territory to pull the large-cap VN30 Index down 0.83 per cent to 973.90 points.

Decliners in the large-cap basket included insurer Bao Viet Holdings (BVH), dairy producer Vinamilk (VNM), Kido Group (KDC), petrol firm Petrolimex (PLX) and Bank for Investment and Development of Viet Nam (BID).

“The Vietnamese stock market is going through a settlement period with modest liquidity and rising disappointment among investors” as trading liquidity was kept at a very low level and alternating status of foreign investors between net sellers and net buyers,” Sai Gon-Ha Noi Securities Co (SHS) said in a note.

However, the VN-Index today may recover and rise to the 990 point level but investors should take a cautious stance and target listed firms that are forecast to record good earnings in the second half of the year, SHS noted. — VNS