Vietnam stocks down, led by banks

An investor follows transactions in the stock market on her mobile phone. - VNS Photo Doan Tung

The benchmark VN Index on the HCM Stock Exchange dropped 0.9 per cent to close at 540.56 points and the HNX Index on the Ha Noi Stock Exchange fell 0.8 per cent to end at 76.24 points.

The financial sector declined after Chinese industrial production in January slowed to its lowest pace in almost three-and-a-half years, suggesting the country could further weaken its currency and provide more policy easing to help its economy.

A weaker Chinese yuan will put pressure on the Vietnamese dong, pushing Viet Nam's central bank to consider weaken its currency in order to assure local products stay competitive in overseas markets.

Yesterday, Viet Nam's central bank raised the reference mid-point rate for its exchange trading band by VND11 to VND21,892 per US dollar with 3 per cent limit on either side of the mid-point rate for local banks to decide their exchange prices.

The indices for banks, insurance firms and brokerage companies fell 1.5 per cent, 1.8 per cent and 1 per cent, respectively.

Among banks, Vietcombank (VCB) lost 1.7 per cent, the Bank for Investment and Development of Viet Nam (BID) slumped 3 per cent, and Sai Gon-Ha Noi Bank (SHB) dropped 1.5 per cent.

Other financial companies such as insurer Bao Viet Holdings (BVH), brokerage firm Sai Gon Securities Incorporation (SSI) and VNDirect Securities Corporation (VND) slipped 2 per cent, 1 per cent and 2.6 per cent, respectively.

Meanwhile, the energy sector index dropped 1.3 per cent yesterday as global oil prices declined after the Organisation of Petroleum Exporting Countries (OPEC) said it produced more than 33 million barrels a day in January, the highest volume in the last six years.

US benchmark crude West Texas Intermediate (WTI) lost 1.6 per cent to trade at $33.08 a barrel after it had gained 11 per cent during the previous four sessions.

London-traded Brent crude was down 0.6 per cent to trade at $35.77 a barrel. It had risen 14 per cent in the previous four sessions.

Among energy stocks, PetroVietnam Gas Corporation (GAS) yesterday fell 4.3 per cent, PetroVietnam Technical Services Corporation (PVS) dropped 4.6 per cent, and PetroVietnam Mud Drilling Corporation (PVC) lost 2.1 per cent.

GAS had surged one-third in the previous six sessions, while PVS had risen 14.6 per cent and PVC had jumped a fourth.

Both markets traded more than 143 million shares worth VND2.1 trillion ($94 million), a decrease of 12 per cent from last week's daily trading value.