Low oil price pull markets down

March, 25/2016 - 09:00

Vietnamese shares yesterday retreated on both local markets from Wednesday gains as energy stocks declined on lower oil prices and banks fell on low investor confidence.

Investors watch market movements at FPT Securities' stock trading floor in Ha Noi. — VNS Photo Truong Vi

HÀ NỘI  (VNS) — Vietnamese shares retreated yesterday on both local markets from gains on Wednesday as energy stocks declined on lower oil prices and banks fell on low investor confidence.

The benchmark VN Index on the HCM Stock Exchange dropped 0.7 per cent to close at 570.66 points, and the HNX Index on the Hà Nội Stock Exchange declined by 0.4 per cent to finish at 80.23 points.

Energy stocks yesterday declined as crude prices extended falls for a second day after the US government reported its oil stockpile had reached its highest level, easing expectations on an agreed production cut that could be made between some OPEC members and other producers next month.

US benchmark West Texas Intermediate (WTI) and London-traded Brent crude fell 1.8 per cent each to trade at US$39.09 and $39.73 a barrel, respectively.

WTI has dropped 5.7 per cent in the last two trading days while Brent crude has fallen 4.9 per cent.

Among energy stocks, PetroVietnam Gas Corporation (GAS) declined by 2.9 per cent, PetroVietnam Technical Service Corporation (PVS) and PetroVietnam Coating Corporation (PVB) slumped 3 per cent and 3.8 per cent, respectively.

Additionally, banks returned to negative territory after US central bank officials gave hints on more than one rate hike for this year, with the first possibly in April.

Expectations on US rate hikes have strengthened the US dollar in recent trading sessions, putting pressure on Việt Nam’s central bank to weaken the Vietnamese đồng, and has lowered investor confidence in local stocks.

Yesterday, the central bank raised its reference mid-point rate for exchange trading band by VNĐ21 to VNĐ21,882 for a dollar. The mid-point rate has gained VNĐ44 this week.

In the banking sector, Vietcombank (VCB) lost 1.9 per cent, the Bank for Investment and Development of Việt Nam (BID) fell 2.3 per cent, and Sacombank (STB) dropped 2.8 per cent.

Other stocks that also helped pull the markets down included insurer Bảo Việt Holdings (BVH), HCM City Securities Corporation (HCM) and property developer Vingroup JSC (VIC).

Both local markets traded more than 224 million shares worth VNĐ3.24 trillion (US$144 million), an increase of nearly one-fifth from Wednesday’s trading value. – VNS