Rallies of several blue chips by the end of yesterday's session cushioned the VN-Index fall, with the Index closing at 457.13, almost unchanged compared with Friday's close, despite it falling more than 1 per cent to 454.5 during the session.
The bourse's value fell by over 12 per cent to almost VND796 billion (US$39.8 million), on the volume of 31.9 million shares traded.
Only 55 shares gained in value, while 154 declined, of which most blue chips tumbled.
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Among major shares, investment corporation Masan Group (MSN), property developer Vincom (VIC), PetroVietnam Finance (PVF) and PetroVietnam Drilling and Well Services (PVD) were among the few gainers that rose to their ceiling price, thanks to heavy buying by foreign investors.
Sai Gon Securities Inc (SSI), with more than 500,000 shares bought by foreign sector, became the most active stock nationwide on a volume of over 2.9 million shares exchanged. SSI closed up 1.2 per cent on Friday's value to VND25,000 ($1.25).
Foreign investors continued to be net buyers on both exchanges yesterday, picking up 1.7 million shares which combined were worth more than VND35 billion ($1.7 million).
The State Bank of Viet Nam's move to lift the prime interest rate from 8 per cent to 9 per cent last Friday, following the announcement it would sell additional US dollars to calm the fevered forex market, could buoy foreign trading but cast negative impacts on domestic investor psychology, analysts at PetroVietnam Securities Co wrote in a market report.
"In (the) short-term, the central bank's commitment not to further devalue the Vietnamese dong will help foreign investors secure the value of their investment which have declined 10 per cent since the beginning of the year," they said.
However, this tighter monetary policy would likely shore up interest rates which would limit capital inflow in the economy, negatively affected business performance and the securities market, they said.
Ho Quoc Tuan, an independent analyst, said the driving force of the Vietnamese stock market's booming period in 2006 and 2007 was short-term investment which originated from high utilisation of financial leverage and State corporations' investment in securities.
Once these inflows were restricted and idle money lying in the civil group was still kept in the form of gold and foreign currency, market development would also be held back, Tuan said.
On the Ha Noi Stock Exchange, the HNX-Index fell by a more substantial 2.72 per cent to close at 109.73. Trading volume fell 23.2 per cent to 22.5 million shares worth VND426 billion ($21.3 million).
Losers largely outnumbered gainers by 216-73.
Kim Long Securities (KLS) and PetroVietnam Construction (PVX) continued to be the most active stocks on the Ha Noi bourse, with more than two million shares of each stock exchanged. KLS closed unchanged at VND12,600 ($0.63) and PVX dropped 0.92 per cent to VND21,300 ($1.07).
