Shares plunge on profit taking

Shares on both stock exchanges failed to sustain the morning gains as investors unloaded shares to take margins after a long run of rising.

On the HCM City Stock Exchange, the VN-Index swayed between gains and losses before closing yesterday lower at 591.57 points, off 0.46 per cent from Friday.


The afternoon's trades doubled the morning with nearly 120 million shares and fund certificates worth VND2.1 trillion (US$99.5 million).

Only one of the three major shares which supported the market in the morning sustained gains in the afternoon. PetroVietnam Gas (GAS) rose 1.21 per cent to VND83,500 ($4) a shares but dairy giant Vinamilk (VNM) and Vietcombank (VCB) retreated to the reference prices.

Other blue chips lost ground, however, pushing the VN30 (tracking the top 30 shares by market capitalization and liquidity) down 0.87 per cent at 670.43 points.

On the Ha Noi Stock Exchange, the HNX-Index also closed down 0.67 per cent at 89.44 points. The market volume totaled nearly 117 million shares worth over VND1.52 trillion ($72 million).

According to many analysts, a correction is essential after a long rising streak that will create new rising momentum for the market to climb higher.

The VN-Index gained 3.17 per cent during March while the HNX-Index on the Ha Noi exchange also rose 11.16 per cent. From January-March, the VN-Index added an accumulative 17.25 per cent and the HNX-Index increased 31.66 per cent, according to data of vietstock.vn.

"We believe money will likely continue to flow into the stock market as investors have few choices with gold price falling and deposit interest rates decreasing. The market will fluctuate between 583-610 points before climbing higher," analysts of APEC Securities Co wrote in a note.

Foreign investors returned as net buyers yesterday after four weeks of net selling. They picked up a combined over VND112 billion ($5.3 million) worth of shares on both stock exchanges yesterday.