Heavy sales on the HCM City Stock Exchange drove the VN-Index back down yesterday to a five-month low of 442.1 points, a dive of 3.77 per cent.
But the heavy sell-off boosted trading volume of 36.1 million shares, worth a combined VND1.28 trillion (US$69.2 million).
On the Ha Noi Stock Exchange, the HNX-Index plunged for a second day, dropping another 4.23 per cent to close at 137.54. Trades totalled VND362.9 billion ($19.6 million) on a volume of 14.3 million shares.
"Market fluctuations are now governed mostly by investor sentiment which seems sensitive to recent economic policies," said Nguyen Toan, a Da Nang-based securities analyst.
Investors continued to be easily influenced by external factors, Toan said, suggesting that fears of inflation making a comeback, doubts about the economic recovery, and Wall Street were all having an impact on the domestic market.
Toan admitted that the amount of capital flowing into the securities market was being influenced by tightened credit.
"But the tightening merely puts the brakes on investor greed," said Toan. "It doesn’t take all of the money out of them."
Nevertheless, investors holding shares acquired with leverage were taking advantage of the recent market rebound to liquidate shares and pay back earlier loans, Toan said.
"This is causing an imbalance between supply and demand, and market fluctuation is the consequence," he said.
Foreign investors, sensing the long-term trend, turned to net buyers on the HCM City Stock Exchange yesterday, acquiring a net of 2.7 million shares. They continued as net sellers in Ha Noi, however, but at a modest net volume of just 60,800 shares.