VN-Index plunges amid global downturn

Vietnam’s benchmark VN-Index dropped Monday by nearly 30 points on massive selling driven by global market downturn and the State Bank of Vietnam’s deposit rate ceiling hike.

The index, which represents the Ho Chi Minh Stock Exchange (HoSE), closed at 1,174.35, down 28.93 points or 2.4%, from last Friday. The bourse saw 462 stocks fall, with 42 hitting their floor prices, and just 42 recording gains.

Trading value rose VND6 trillion to over VND17.55 trillion (nearly $740 million) as 757 million changed hands during the session, marking the highest trading value in the last two weeks.

HPG of Hoa Phat Group ranked first in terms of liquidity with VND574 billion ($24.2 million in transaction value, followed by DIG of Development Investment Construction JSC, HAG of Hoang Anh Gia Lai Group, and VND of VNDirect Securities.

The VN30-Index, which gathers 30 largest stocks by market value and liquidity, lost more than 28 points (2.3%) to 1,187.22, with almost all stocks losing, except for GAS of PVGas and VIB of Vietnam International Bank, which inched up slightly.

Meanwhile, the VNMidcap and VNSmallcap, which represent the mid- and small-cap stocks, fell 3.77% and 3.68%, respectively.

On the Hanoi bourse, the HNX-Index lost 8.76 points (3.31%) to 255.68, while the unlisted public company market's UPCOM-Index dropped 1.91 points (2.16%) to 86.68.

Foreign investors continued to be net sellers for the fourth consecutive session, with a net value of nearly VND1.66 trillion ($70 million).

Following the Fereral Reserve's raising benchmark interest rate by 0.75 percentage points on September 22, the State Bank of Vietnam joined the global trend by increasing its regulatory interest rates.

A slew of small- and medium-size commercial banks have hiked their deposit interest rates by 0.3-1 percentage points after the State Bank raised the deposit rate ceiling Friday.

U.S. and European stocks tumbled on Friday as fears grew that a central bank prescription of raising interest rates to tame inflation will drag major economies into recession, Reuters reported.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 1.62%. Meanwhile, the S&P 500 (.SPX) and the Nasdaq Composite (.IXIC) already in bear market territory, dropped 1.72% and 1.85, respectively.