A shockwave from the international stock market triggered a massive sell-off in the Vietnamese stock market this afternoon. More than 1 billion shares changed hands on the two main exchanges, with the VN-Index plunging 3.92% (-48.53 points) to near its April 2024 low. Today’s drop was also the biggest since the 4.7% freefall on April 15, 2024.
Why did the market panic so much, especially after the release of positive macroeconomic figures for July and a string of optimistic Q2 earnings reports? In reality, this sell-off wasn’t entirely homegrown but was influenced by external factors: a steep decline in global stock markets coupled with a flood of news about the tense situation in the Middle East. The market is currently grappling with a deluge of negative information.
Consecutive sessions of sharp declines have pushed a slew of stocks into a state of substantial losses, and if investors employed leverage, there’s no doubt that forced liquidation pressure emerged. The intense selling pressure this afternoon caused the VN-Index to break below the psychological support level of 1200 points, settling at 1188.07 points, just above the index’s April low (which closed at a low of 1174.85 points).
Trading volume on the HoSE in the afternoon session nearly doubled that of the morning, reaching 15,488 billion VND, the highest in 13 sessions. While there were only 5 stocks that hit the daily limit down in the morning, that number climbed to 91 by the close of the afternoon session. Across all three exchanges, 127 stocks hit their daily limit down. On April 15, the VN-Index had 111 stocks hitting their daily limit down.
The breadth of the HoSE at the close was extremely negative, with 24 gainers versus 448 losers. Even though today’s point loss was smaller than that of April 15, and there were fewer stocks hitting their daily limit down, the breadth ratio was much worse, with only 0.07 gainers for every loser, compared to a ratio of 1:0.09 on April 15.
Today’s selling pressure was immense. Among the 91 stocks that hit their daily limit down on the HoSE, 10 had trading volume exceeding 100 billion VND. This exchange also had a total of 202 stocks declining by more than 4% (while the VN-Index fell by 3.92%), equivalent to nearly 54% of the stocks traded today. Moreover, this group of steep decliners accounted for 63.3% of the exchange’s total trading value.
The VN30-Index closed down 3.82% in value, with no stocks in the green, and GVR hitting its daily limit down. The top 10 stocks by market capitalization witnessed a string of sharp declines: BID fell 3.46%, GAS dropped 3.04%, FPT declined 3.73%, HPG lost 4.77%, CTG decreased by 4.44%, TCB fell 5.11%, and VHM slipped 4.17%. The lightest decliner in the VN30 basket was VIC, which still shed 1.67%, and half of the basket (15 stocks) fell more sharply than the representative index.
The most vulnerable stocks remained speculative small-cap and micro-cap stocks, which had their prices pushed to unreasonable levels recently. 90 of the stocks that hit their daily limit down belonged to the mid-cap and small-cap groups, with the Midcap index closing down 5.04% and the Smallcap index falling 4.62%. The list of stocks that were sold off is extensive, and the stocks with the highest trading volume at the daily limit down were VND with 237.8 billion VND, PC1 with 208.7 billion, PVD with 199.8 billion, NKG with 186.4 billion, HDG with 165.7 billion, DXG with 141.6 billion, HVN with 138.4 billion, CTD with 105.3 billion, and AAA with 101.6 billion.
Foreign investors continued to sell today, although their selling intensity eased somewhat. Specifically, they injected new capital of about 1,317 billion VND, double that of the morning session, but their selling also increased by 40% to 1,566.6 billion. Thus, net selling still reached 249.6 billion VND, lighter than the morning session’s 481.3 billion. Today’s total foreign selling on the HOSE accounted for only 11.4% of the exchange’s total trading volume. Hence, the main selling pressure still came from domestic investors.
