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Stock market hits 2-month low on possible military intervention in Syria

Stock market hits 2-month low on possible military intervention in Syria

Wednesday, August 28, 2013, 20:00 GMT+7

Local stock market saw the biggest drop in two months on Wednesday when stock markets worldwide plummeting on the news of a possible military intervention of the US and its Western allies in Syria.

Selling pressure has spiked on both two national floors which caused liquidity on Ho Chi Minh Stock Exchange (HoSE) and Hanoi Stock Exchange (HNX) to rise over 100 percent and 50 percent over the previous day, respectively.

By the end of Wednesday trading session, the VN-Index of Ho Chi Minh Stock Exchange (HoSE) fell 2.53 percent to 473.3 points, its biggest drop in since June 25.

Total transaction value on HoSE hit VND1.275 trillion, more than doubling that on Tuesday.

The market has just recently been hit hard following the regional trend as investors worried that the US Federal Reserve (Fed) had signaled to reduce monetary stimulus from September.

VNM shares of Vinamilk fell by VND6,300 to VND133,000 per share, the lowest price in the session and also a two-month low.

In the list of VN30, the 30 biggest capitalization stocks of the market, only MBB shares of Military Bank kept the reference price, while a series of other stocks, including blue-chips, plunged.

Local insurer BaoViet Holdings saw its BVH share lose 6.3 percent in value to VND35,600 per share, the lowest value in 2013, while GAS share of partially equitized conglomerate PetroVietnam Gas Corp dropped 2.2 percent and VCB share of VietcomBank lost 1.2 percent.

Meanwhile, HNX-Index lost 1.18 percent to 60.68 points with total transaction value reaching VND207 billion, rising about 50 prevent over the previous session.

"Investors sold equity and started to buy gold as they're concerned over possible U.S.-led military action in Syria, especially foreign investors," Nguyen Anh Tuan of FLC Securities told Reuters.

The VN-Index fell 2.4 percent at midday, tracking falls on global markets driven by fears of a possible U.S.-led military intervention in troubled Syria, traders told Reuters.

By midday, the top 30 firms by capitalization on the HoSE’s VN30 index all lost ground, led by real estate firms and banks.

Vietnamese investors often turn to the popular safe haven of gold when stocks and bonds are unfavorable. The selling price of country's benchmark SJC branded gold was VND38.8 million per tael on Wednesday, a high of more than one month, Reuters reported.

On the world market, gold price extended gains to a fifth straight session on Wednesday and climbed over 1 percent to its highest in more than three months, buoyed by safe-haven buying due to geopolitical tensions in Syria, according to Reuters. Silver tracked gold higher, gaining more than 2 percent to trade at its highest in more than four months.

The world and regional stock markets in the last 2 days became more volatile following the news that the US and its allies are ready for a military attack against Syria tomorrow. Israeli military force has been alert to brace for the possible attack.

The US and its allies geared up for a probable military strike against Syria that could come within days and would be the most aggressive action by Western powers in the Middle Eastern nation's two-and-a-half-year civil war, Reuters reported.



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