Economy
Fed’s foreseen rate cuts affect foreign exchange rate
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| Investors at Vietcombank Securities Corp’s exchange platform. Local markets extended a two-day decline after US central bank signaled a possible rate hike in June and oil prices fell further. - VNS Photo Trương Vị |
Viet Nam News
HÀ NỘI – Vietnamese shares slid for a second day on both local exchanges as investor confidence declined on expectations that a US rate hike in June and declining oil prices would send energy firms down further.
The benchmark VN Index on the HCM Stock Exchange and the HNX Index on the Hà Nội Stock Exchange fell 0.5 per cent each to finish at 619.20 points and 81.81 points, respectively.
The southern index has dropped 0.9 per cent in the last two sessions and the northern index has declined by 0.5 per cent during this period.
“Investor confidence turned low after the US central bank signaled it could raise interest rates in June,” Sài Gòn-Hà Nội Securities Corp (SHS) wrote in its daily report.
A rate hike could force Việt Nam’s central bank to weaken the Vietnamese đồng to protect investors’ đồng-based assets in local markets as the US dollar will get stronger against other currencies.
Yesterday, the daily reference mid-point rate jumped VNĐ20 to VNĐ21,910 from VNĐ21,890 on Wednesday. A weaker đồng drove listed banks down as they will have to spend more local money to trade for US dollars and reduce their earnings from this business segment.
Vietcombank (VCB), Vietinbank (CTG), Sacombank (STB), Sài Gòn-Hà Nội Bank (SHB) and the Bank for Investment and Development of Việt Nam (BID) were among the decliners in the banking sector. These stocks lost between 1.1 per cent and 3 per cent.
Brokerage firms also suffered from lower investor confidence. The biggest firms seeing losses in this sector included HCM City Securities Corp (HCM), Sài Gòn Securities Inc (SSI), VNĐirect Securities Corp (VNĐ) and Kim Long Securities Corp (KLS), which slid between 0.5 per cent and 1.7 per cent.
Additionally, energy stocks continued their downward trend as oil prices extended drops after the markets witnessed an unexpected gain in US stockpiles.
London-traded Brent crude skid 2.2 per cent to trade at US$47.84 a barrel. Brent crude has gone down 2.9 per cent in the last two trading days.
Among local energy shares, PetroVietnam Gas Corp (GAS) recorded the lowest fall of 0.9 per cent, while PetroVietnam Mud Drilling Corp (PVC) was the biggest loser by tumbling 4.1 per cent.
The recent centre-of-attention conglomerate Hoàng Anh Gia Lai (HAG) yesterday retreated 1.2 per cent after it surged 13.5 per cent in the previous two sessions.
Both local markets traded nearly 189 million shares worth VNĐ3 trillion ($134.5 million), a decrease of nearly 4 per cent from Wednesday’s trading value. – VNS
