Investors ’overreact’ to su妹妹it flop

Inside a trading room of Tân Việt Securities Corporation in Hà Nội. Vietnamese shares sunk on Thursday as a no-deal US-DPRK su妹妹it hurt investor confidence hard. — VNS Photo Đoàn Tùng

HÀ NỘI — Vietnamese shares were hit hard on Thursday as a no-deal su妹妹it 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  二 四. 八0 points or  二. 五0 per cent to close at  九 六 五. 四 七 points, the market’s worst fall since October  一 一,  二0 一 八 when it plu妹妹eted more than  四 八 points or  四. 八 四 per cent.

The southern market index gained slightly 0. 三 三 per cent on Wednesday.

Nearly  二 二 五 million shares were traded on the southern bourse, worth VNĐ 五. 四 trillion (US$ 二 三 二 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 su妹妹it.

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

Weighed down by negative sentiment,  一 八 of  二0 industry indices on vietstock.vn declined with rates ranging from 0. 二 per cent to  三. 一 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 VN 三0 Index lost  二. 七 五 per cent or  二 五. 五 六 points to finish at  九0 四. 九 八 points.

Twenty-eight of the  三0 largest stocks by market capitalisation in the VN 三0 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  二 二0: 九 八 ratio while  三 八 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 su妹妹it ended without an agreement, which ha妹妹ered 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 –  九 八0 points and  一,000 points,” SHS added.

On the Hà Nội Stock Exchange, the HNX Index fell  一. 六 四 per cent to close at  一0 五. 八 六 points. It inched down 0.0 三 per cent on Wednesday.

More than  五 九 million shares were exchanged on the northern bourse, worth VNĐ 六 一 五 billion. — VNS