Econ
FED’s rate hike expected to leave adverse impact on Vietnam’s stock market
Vietnam stock market experienced discouraging response after this hike.
The Federal Reserve (FED)’s rate hike this time could leave adverse impacts on Vietnam stock market while the market is seeking supportive information to bounce back to the support zone at 915-925, according to Bao Viet Securities Company (BVSC).
Based on BVSC’s observation of the previous three rate hikes, Vietnam stock market experienced negative response after this hike.
The first hike at the meeting on March 20- 21 caused the benchmark Vn-Index to slightly drop in the next sessions and quickly finalize the uptrend after peaking on April 12. The second hike on June 12-13 witnessed the tumble of Vietnam stock market after rising to 1,039.02 on June 11 and hit the second quarter bottom at 893.16 on July 11, 2018.
Subsequently to the third hike on September 25-26, the index quickly lost its rising momentum, hitting the fourth quarter peak at 1,023.62 on October 4, 2018 prior to sliding to 888.69 on October 30.
The Vn-Index extended losses to a 6th session running with sideways movement. At market close on December 20, the gauge lost 1.0 points or 0.11% to 918.24 points. In the VN30 Index, representing the 30 largest stocks in terms of capitalization, 18 stocks lost and 11 stocks gained. Market volume fell from 119 million shares in the previous session to 107 million shares today. Foreign investors were net sellers for a second session in a row with a net selling value of more than VND89 billion (US$3.81 million).
In its decision on December 19, 2018 (as of local time), the FED raised benchmark lending rates from 2.25% to 2.5%. Although this hike was in line with forecasts of global analysts and BVSC, it still triggered negative response of the US stock market.
The highlight of the FED’s meeting was the high chance that there would not be many rate hikes at the pace as announced. However, this news is not encouraging enough to make investors more confident, thereby strengthening the view of BVSC that the FED rate hike would surprise investors.
Nevertheless, the Dow Jones and S&P 500 are staying on uptrend, reflecting investors' expectation about a recovery. It is noticeable that the index’s derivatives futures in the US fluctuate at an unpredictable and quick pace, so expectation about a recovery is not firm.
Illustrative photo.
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The first hike at the meeting on March 20- 21 caused the benchmark Vn-Index to slightly drop in the next sessions and quickly finalize the uptrend after peaking on April 12. The second hike on June 12-13 witnessed the tumble of Vietnam stock market after rising to 1,039.02 on June 11 and hit the second quarter bottom at 893.16 on July 11, 2018.
Subsequently to the third hike on September 25-26, the index quickly lost its rising momentum, hitting the fourth quarter peak at 1,023.62 on October 4, 2018 prior to sliding to 888.69 on October 30.
The Vn-Index extended losses to a 6th session running with sideways movement. At market close on December 20, the gauge lost 1.0 points or 0.11% to 918.24 points. In the VN30 Index, representing the 30 largest stocks in terms of capitalization, 18 stocks lost and 11 stocks gained. Market volume fell from 119 million shares in the previous session to 107 million shares today. Foreign investors were net sellers for a second session in a row with a net selling value of more than VND89 billion (US$3.81 million).
In its decision on December 19, 2018 (as of local time), the FED raised benchmark lending rates from 2.25% to 2.5%. Although this hike was in line with forecasts of global analysts and BVSC, it still triggered negative response of the US stock market.
The highlight of the FED’s meeting was the high chance that there would not be many rate hikes at the pace as announced. However, this news is not encouraging enough to make investors more confident, thereby strengthening the view of BVSC that the FED rate hike would surprise investors.
Nevertheless, the Dow Jones and S&P 500 are staying on uptrend, reflecting investors' expectation about a recovery. It is noticeable that the index’s derivatives futures in the US fluctuate at an unpredictable and quick pace, so expectation about a recovery is not firm.
