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VN shares rally higher on new rate cuts
After struggling in the morning session, Vietnamese shares lifted in the latter half as a rate cut by the central bank boosted market sentiment.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange gained 0.84 per cent to end Tuesday at 835.32 points.
The VN-Index has increased by a total of 9.55 per cent in the last six trading days.
More than 322.2 million shares were traded on the southern bourse, worth nearly VND5.80 trillion (nearly US$249 million).
The total included more than 290 million shares, worth VND5.04 trillion, being traded in the order-matching system.
The market succumbed to profit-taking pressure in the morning as the VN-Index fell as much as 1.04 per cent.
Banks helped drive the market as the sector index went up 1.3 per cent, according to vietstock.vn.
The banking sector was boosted by news that the State Bank of Vietnam on Wednesday will cut short-term saving interest rates by 0.3-0.5 percentage points and lending rates by 0.5 percentage points, MB Securities Co (MBS) said in its daily report.
Short-term saving rates will not be higher than 4.75 per cent per annum and lending rates will not exceed 6 per cent per annum.
This is the second time the SBV has cut interest rates in the last two months to help local firms get access to low-rate loans and recover amid the coronavirus pandemic.
Lower saving rates means investors would not seek short-term profits in bank savings and they would be encouraged to spend money on other assets, including stocks, according to securities firms.
TPBank (TPB) was the best-performing stock, surging 6.9 per cent to end Tuesday at VND20,050 apiece. Other key bank stocks such as Military Bank (MBB), Techcombank (TCB), Vietinbank (CTG) and Vietcombank (VCB) rose between 1.5 per cent and 2.4 per cent.
Other well-gaining sectors included insurance, food and beverage, plastics and chemicals, technology and information, and seafood processing.
Liquidity had increased strongly in the last month and market breadth remained positive, proving market sentiment was quite positive at the moment, MBS said.
Foreign investors net-buying local stocks was also a boost for the market after they had remained net sellers since January 30, MBS added.
Technical indicators were showing it was the chance for the VN-Index to beat 880 points in the coming days, the brokerage firm added.
On the Ha Noi Stock Exchange, the HNX-Index inched up 0.18 per cent to close at 111.78 points.
The northern market index has rallied a total 6.04 per cent in the five trading days since May 6.
Nearly 58 million shares were traded on the northern bourse, worth VND543.5 billion.
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