HÀ NỘI — Vietnamese shares were hit hard on Thursday as a no-deal summit between the US and the Democratic People’s Republic of Korea (DPRK) struck investors hard and spread a massive sell-off across the trading board.

The benchmark VN Index on the Hồ Chí Minh Stock Exchange plunged 24.80 points or 2.50 per cent to close at 965.47 points, the market’s worst fall since October 11, 2018 when it plummeted more than 48 points or 4.84 per cent.

The southern market index gained slightly 0.33 per cent on Wednesday.

Nearly 225 million shares were traded on the southern bourse, worth VNĐ5.4 trillion (US$232 million).

According to an analyst at MB Securities JSC, the fall of the Vietnamese stock market was mostly caused by panicked investors, who were disappointed by a no-deal US-DPRK summit.

“Investors seem to have overreacted to the result of the summit,” he told Việt Nam News under condition of anonymity.

Weighed down by negative sentiment, 18 of 20 industry indices on vietstock.vn declined with rates ranging from 0.2 per cent to 3.1 per cent.

The worst-performing sectors included consumer staples, real estate, securities, banking, retail, seafood processing and rubber.

Large-cap stocks also performed badly as the blue-chip VN30 Index lost 2.75 per cent or 25.56 points to finish at 904.98 points.

Twenty-eight of the 30 largest stocks by market capitalisation in the VN30 basket declined. Among those were real estate firms Vinhomes (VHM) and Vincom Retail (VRE), dairy producer Vinamilk (VNM), Sacombank (STB), brewer Sabeco (SAB) and airline Vietjet (VJC).

Gaining stocks were outnumbered by decliners with a 220:98 ratio while 38 stocks ended flat.

Technically, the steep decline on Thursday helped the stock market get out of the “overbought zone” and market conditions are now more neutral than a few days ago, according to Sài Gòn-Hà Nội Securities (SHS).

“The VN Index is heading down to its strong threshold and it is unlikely the VN Index will suffer another hit on the next trading day,” SHS said in its daily report.

Though the US-DPRK summit ended without an agreement, which hammered market sentiment, investor confidence may “return to the positive territory in the next few days” and help the market make some recoveries, SHS said.

“But the short term uptrend will be challenged by the two milestones – 980 points and 1,000 points,” SHS added.

On the Hà Nội Stock Exchange, the HNX Index fell 1.64 per cent to close at 105.86 points. It inched down 0.03 per cent on Wednesday.

More than 59 million shares were exchanged on the northern bourse, worth VNĐ615 billion. — VNS