Vietnam’s benchmark VN-Index would soon recover following a free-fall of 73.23 points in yesterday’s trading session, or a decline of 6.67% from a day earlier, said a senior official from the State Securities Commission of Vietnam (SSC), the country’s stock market watchdog.

The outlook of Vietnam’s stock market remains bright in long-term. Photo: Cong Hung

The official, talking on condition of anonymity, made the assessment while referring to improved market fundamentals compared to the past.

“The slump yesterday was due to a combination of various factors, including pressure for correction after a long period of uptrend that took the Vn-Index close to its all-time high of 1,204,” stated the official.

Meanwhile, Vietnam’s stock market was also impacted by the declining trend of from world’s major stock exchanges, with the likes of Dow Jones, S&P 500 and Nasdaq Composite falling by 2.1%, 2.6% and 2.6%, respectively, while stock exchanges of Hong Kong, Shanghai also went down by over 2%.

In case of Vietnam, the emergence of new local transmissions in Quang Ninh and Hai Duong caused negative sentiment among investors, especially new ones, and triggered a wave of sell-off at any cost, he noted.

In the short-term, the SSC’s representative expected to the market to continue going through further correction phase, due to the complicated Covid-19 situation that would affect businesses and trade activities.

“However, for the long-term, the outlook of Vietnam’s stock market remains bright,” stated the official, adding positive macro-economic environment would be a major boost for the market.

“Vietnam had successfully controlled the last two Covid-19 outbreaks, and this time I see no difference given the high determination of the entire political system and the positive response of the public,” he stressed.

At the close this morning [January 29], strong capital inflows of nearly VND17 trillion (US$737 million) into the stock market helped the VN-Index increase by 31.64 points or 3.09% to 1,055.58. Foreign investors remained net buyers in the market with over VND1.1 trillion (US$47.73 million).