The local stock market has suffered from a turbulent week in the global financial market following the announcement from the US Federal Reserve chairman Ben Bernanke last Wednesday.

The benchmark VN-Index of Ho Chi Minh Stock Exchange (HoSE) closed at 498.84 points on Friday, down 0.13 percent day on day.

It recovered the early gain due to weakening buying demand following the tumble of regional markets after the US Fed chairman mentioned the exit of ongoing stimulus packages, or the 3rd round of quantitative easing.

The fall of the southern bourse’s indicator extended the loss of the floor to the third day in a row.

It reached it 52-week high at 533.15 points on June 10.

The HNX-Index of the Hanoi Stock Exchange slipped 0.42 percent against the previous day to 64.26 points.

"The market has been through a turbulent two weeks with no sign of an imminent recovery, although it is likely to pick up in the mid-term," Vu Thi Thu Trang, of Asia-Pacific Securities, told Reuters.

Foreign investors were in a net-selling mood with a combined VND759 billion ($36.43 million) last week, up 6 times week on week.

Topping the net-selling list of foreign investors is the HAG share of Hoang Anh Gia Lai, with 9 million shares worth some VND199 billion, followed by STB of Sacombank with VND119 billion.

Turbulent week worldwide

Fed Chairman Ben Bernanke said on June 19 that the Fed may taper its bond purchases later this year and halt them around mid-2014 as long as the world’s largest economy performs in line with its projections, Bloomberg reported.

Following the announcement, on the world market, the MSCI Emerging Markets Index on Friday fell 0.9 percent to 900.54, extending its weekly drop to 5.6 percent. The indicator has tumbled 17 percent from its January 3 high, according to Bloomberg.

More than $6.9 billion left funds investing in developing-nation debt in the four weeks to June 19, the most since 2011, Bloomberg quoted Morgan Stanley, which cited EPFR Global data. The exodus is reversing the $3.9 trillion in cash that flowed into emerging markets in the past four years.

Total net assets of the 200 richest people in the world last week fell to $83 billion after global markets plunged amid the biggest sell-off since September 2011.

One of the biggest is the loss of 73-year-old Mexican billionaire Carlos Slim. According to Bloomberg Billionaires Index ranking, his fortune declined $5 billion. Since early this year, his fortune has dropped a total of $13.6 billion.

Billionaire Bill Gates continues to consolidate his position as the richest billionaires in the world with assets worth $69.6 billion, even though Microsoft shares fell 3.3 percent in the week.

The world capital market was the only area that suffered Immediately after the Fed’s announcement, the bond market was also affected with interest rate hiking, increasing even more sharply after Bernanke said he does not worry about rising interest rates.

Meanwhile Noble prize winning-economist Paul Krugman, a professor of Woodrow Wilson School, said the Fed’s statement and the following move will likely end up as "a historical mistake."

If the world economy’s recovery was well on track, then everything will be fine. But if things worsen again, it is clear that redeployment of quantitative easing must come into life again, he said.

As a result, Prof Paul Krugman said he hopes the real economy will recover at a speed that will render his worries insignificant. If not, the Fed has caused far greater consequences than it seems to be aware of.