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Market down as sentiment follows US slump
The global stock market woes cast a pall over sentiment in Vietnam Thursday, as the VN-Index slumped 3.31 percent, or 11.15 points, to close at 325.74.
The benchmark index is only 12.11 points higher than this year’s low of 313.63.
Trading volume was 15.7 million shares as 142 shares lost, 11 remained unchanged and just 17 gained.
“Vietnam's stock market has been aligned with the US stock market since the financial crisis began in September,” Bloomberg quoted Nguyen Sy Thuan, an analyst at the Hanoi-based Vietnam International Securities Co., known as VISecurities, as saying.
“Investors here wake up in the morning, refer to the US stock performance, and the VN-Index that day will see the same gain or drop in the US. This has happened since the credit crisis started.”
Thuan also said the State Bank's rate cut would help companies in the long term when they need to borrow money. “The rate cut news will not help the VN-Index to advance strongly right away,” he said. “Companies are still dependent on the export markets and import demand from the US, Europe and other countries has dropped. The stock market may advance slightly.”
The State Bank of Vietnam will cut the key rate and lower bank reserve requirements to protect the economy from the global financial meltdown, according to a statement on the central bank’s website Thursday.
Foreign investors remained net sellers, notching up sales of VND449 million (US$27,000).
Global carnage
World stocks dropped to 5-1/2 year lows and oil hit 22-month troughs as investors reacted to dire Federal Reserve warnings on the economy and fears about the viability of major US auto makers and bank giant Citigroup.
Federal Reserve officials slashed economic growth forecasts through 2009, with the lower range of the Fed's central tendencies forecasting the US economy could shrink by 0.2 percent.
At least one among household names General Motors Corp., Ford Motor Co. and Chrysler LLC is at risk of bankruptcy if a last-minute bailout plan fails.
The plight of US automakers highlighted the increasing damage which the world's financial crisis is inflicting on the real economy.
The MSCI world equity index fell 2.3 percent to 197.90, its lowest since May 2003, driven lower in Asia after data showing Japan's exports to Asia fell for the first time in six years.
European shares also approached their lowest since June 2003, with the FTSEurofirst 300 index of leading European shares dropping 3 percent, following losses of 5 percent or more on Wall Street.
European banks remained under pressure after Citigroup Inc. faced a crisis of confidence on Wednesday as investors questioned the survival prospects of the US banking giant.
Hoang Uy
Thanh nien, Reuters
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