Shares ease on fears of economic downturn amid tightening policy

October 18, 2022 - 06:34
Vietnamese shares slipped on Monday as investors braced for a further drastic tightening in global and local financial conditions.
A production line of SABECO (SAB). SAB lost 1.8 per cent yesterday. Photo courtesy of SABECO

HÀ NỘI Vietnamese shares slipped on Monday as investors braced for a further drastic tightening in global and local financial conditions.

The VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) closed the day at 1,051.58 points, a decrease of 0.97 per cent.

The market sentiment was negative with more stocks decreasing, of which 165 stocks inched higher and 291 reduced. Liquidity increased compared to the previous session, with more than 497.4 million shares traded, equivalent to a value of VNĐ9.5 trillion (US$390.6 million).

The index's reversal was caused by some pillar stocks as the 30 biggest stocks tracker VN30-Index posted a loss of 1.34 per cent, to finish at 1,047.20 points. Of the VN30 basket, eight stock climbed, while 16 declined and six stocks ended flat.

Among the worst performers were Vietinbank (CTG), FPT Corporation (FPT), HDBank (HDB), Hoa Phat Group (HPG), Khang Dien House (KDH), Military Bank (MBB), Novaland (NVL), Vietnam National Petroleum Group (PLX) and Sabeco (SAB).

“The global stock market fluctuated strongly in response to many unpredictable events. Market sentiment remains weak with the risks of economic recession under pressure of interest rate hikes to tighten monetary policy of central banks around the world. The US’ drastic interest rate rise to control inflation raised concerns of waves of hikes in other countries accordingly,” reported the financial news site

“The energy crisis in European countries and the Zero-COVID policy of China - the world's second-largest economy have put great pressure on the stock markets of major economies, making these markets remain unsustainable and enter a deep declining phase,” it said.

“The pressure from this decline also negatively affected Việt Nam's stocks, causing the VN-Index to enter a downtrend from the beginning of the second quarter of 2022. Cash flow is tending to withdraw from the market, although the domestic macro picture in general still maintains stable growth.”

Persistent sell-off pressure hit many key sectors of the market. On a sector basis, 14 out of 25 sector indices on the stock market lost ground, including insurance, banking, wholesale, IT and logistics, agriculture, real estate, food and beverage, retail, healthcare, construction materials, and plastic and chemical production.

On the other side, gainers were rubber production, oil and gas, securities, seafood production and construction.

The HNX-Index on the Hà Nội Stock Exchange (HNX) also ended lower. The northern market index lost 0.63 per cent, to close at 226.46 points.

Over 43.3 million shares were traded on the HNX, worth VNĐ798 billion. VNS