Investors responded negatively to higher petrol prices and electricity rates announced on Monday, sending share prices plunging across-the-board on the HCM City Stock Exchange. The VN-Index lost 2.69 percent of its value to end yesterday's trading session at 496.29, while nearly 90 percent of codes lost value.
The overall value of trades rose slightly, however, to VND1 trillion (US$52.6 million), on a cumulative volume of 25.8 million shares.
Steel pipe manufacturer Asia Huu Lien Company (HLA) surprised the southern bourse, becoming the most-active share with over 1.3 million traded.
On the Ha Noi Stock Exchange yesterday, the HNX-Index also dropped by 2.4 percent to close at 161.56 points. The value of the day's trades reached VND329.5 billion ($17.3 million) on a volume of 10.4 million shares.
Over 70 percent of codes on the northern bourse were losers on the day, while Kim Long Securities Company (KLS) continued to be the most heavily traded share there, with nearly 2 million changing hands.
Blue chips sagged on both bourses as investors rushed to realise profits, wrote FPT Securities Company analysts in their daily report, pointing to declines in the values of Sacombank (STB), Bao Viet Holdings (BVH) and Vinamilk (VNM) in HCM City, and Asia Commercial Bank (ACB), Vinaconex (VCG) and PetroVietnam Construction (PVX) in Ha Noi.
The announcement of higher fuel and electricity costs dovetailed with inflation worries to make investors skittish. February CPI figures were announced yesterday to have climbed to 1.68 per cent in HCM City and 2.16 per cent in Ha Noi.
But Au Viet Securities Company investment specialist Ta Thu Tin said investors seemed to respond more negatively to the fuel price and electricity rate increases.
Inflation in February was no surprise and acceptable, as it was often above 2 percent every year during Tet, said Tin.
"But the fuel price increase worries investors about the possibility of high inflation in March, when it is usually low," Tin said.
The State Bank's impending move, announced yesterday, to allow commercial banks to negotiate lending interest rates with enterprises could result in interest as high as 16-17 percent per year, increasing credit costs to businesses, Tin added.
Foreign investors yesterday remained net buyers on both stock exchanges, buying a net of VND77 billion ($4 million) worth of shares.