Massive selling pressure hit many large-caps, drowning the market, making VN-Index become the biggest loser index in Asia on Tuesday session.

An investor watches banking stock indexes on an electronic board at the SSI stock trading floor. 

The benchmark VN Index on HCM Stock Exchange plummeted 4.34 per cent to close at 906.01 points, extending its decline from the previous fall of 1.42 per cent.

The HNX Index on Ha Noi Stock Exchange lost 3.86 per cent to end at 98.80 points. It had decreased by 3.21 per cent in the previous session.

Some 222.1 million shares, worth VND5.1 trillion (US$223 million), were traded on the two local exchanges.

The number of declining stocks tripled that of gainers by 373 to 106, indicating a temporary negativity of the market condition.

The capital outflow resulted in 18 of the 20 sectors seeing share prices drop, according to vietstock.vn, including large-cap stocks in the VN30 basket.

The large-cap VN30 Index fell 4.10 per cent to 891.97 points at the end of the day with 29 of the 30 largest stocks by market capitalisation declining.

Negative sentiment occurred right at the beginning of the morning session, together with strong selling force. Therefore, a series of large stocks, especially bank group, has been severely hit.

Many large listed bankers, including JSC Bank For Investment And Development Of Viet Nam, Techcombank, Vietinbank and VPBank, saw share plunging to the floor prices, hitting the daily limit decline of 7 per cent.

In Q1, the significant growth of VN-Index made Viet Nam the best-performing market in the world. But since the beginning of Q2, the situation has reversed.

The market has fallen sharply in recent months due to negative market outlook.

Cash flow continued to stand outside the market, making stock price weak as investors remained quiet amidst an unpredictable market condition with little supportive information, according to HCM City 

Securities Corp (HSC).

Rising volatility on the global markets and fears of a trade war between the two biggest economies—the US and China—dampened investor confidence.

After the US officially imposes tariffs on Chinese goods on July 6, the retaliation of China would be a major concern of investors and may cause strong volatility on global stock markets, according to Bao Viet Securities Company.

Notably, the USD/VND exchange rate quoted at banks and on free market simultaneously rocketing on Tuesday also caused cautiousness among investors.

BVSC said in its daily report that after the slump today, a number of stocks fell to short-term attractive price range, lifting bottom-fishing demand in the next sessions.

“The two indices are likely to have more balanced trade with slight decline and divergence among stocks with expectation in the upcoming Q2 income statement season,” it added. — VNS