HÀ NỘI — The market started the new week with a sharp reversal, as the VN-Index erased an early gain of more than 21 points and closed down 1.7 per cent amid broad selling pressure across large-cap, banking and securities stocks.

The VN-Index on the Hochiminh Stock Exchange (HoSE) subsequently fell by 31.447 points, or 1.7 per cent, to 1,821.64 points. The benchmark even climbed 21.4 points in early trading to an intraday high of 1,874.48 points.

Market breadth was negative, as the number of decliners nearly tripled that of gainers. However, trading value increased from the previous session to more than VNĐ17.1 trillion (US$656 million). 

Vingroup (VIC) was the biggest drag on the benchmark. The stock fell by 4.33 per cent and took 17.45 points off the VN-Index, accounting for more than half of the index's total decline during the session.

Several other large-cap stocks also weighed heavily on the market.

Vietcombank (VCB) dropped 1.53 per cent and reduced the benchmark by 1.56 points, while Vinhomes (VHM) declined by 0.93 per cent and cost the index another 1.19 points.

Techcombank (TCB) lost 2.15 per cent, taking 1.03 points off the benchmark index, while VietinBank (CTG) fell by 1.91 per cent and reduced the index by another 0.97 points.

The index pared losses on the gains of some stocks. Of these, Vinpearl (VPL) provided the strongest support, contributing 1.33 points to the benchmark. 

LPBank (LPB), SeABank (SSB) and Vincom Retail (VRE) also provided support, although their gains were insufficient to offset declines among other heavyweight stocks.

On the Hanoi Stock Exchange (HNX), the HNX-Index fell by 1.93 points, or 0.68 per cent, to 280.6 points. Over 53 million stocks were traded on the northern bourse, worth nearly VNĐ939 billion. 

Foreign investors continued record net selling on the two main exchanges, offloading VNĐ469.45 billion on the HoSE and VNĐ4.43 billion on HNX. 

The sharp decline came as the market entered a period that analysts said could see heightened volatility.

According to MBS Research, September has typically been a relatively weak month for the stock market over the past four years. The firm said the pattern was related not only to statistical factors, but also to investor sentiment and the market's information disclosure cycle.

MBS also highlighted mid-September as a potentially sensitive period for global capital flows, with monetary policy decisions from the US Federal Reserve and the Bank of Japan (BOJ) scheduled in close succession.

MBS analysts said monetary policy decisions by the two central banks could have a dual impact on global liquidity.

In particular, if the BOJ continues tightening monetary policy, appreciation of the Japanese yen could lead to an unwinding of the yen carry trade, according to the securities firm.

Under such a scenario, global investment funds could reduce their exposure to higher-risk assets as they close positions and repay yen-denominated borrowings, according to MBS.

If this occurs, the resulting portfolio adjustments could indirectly put pressure on capital flows into emerging and frontier markets. — BIZHUB/VNS