Sell-off intensified on Vietnam’s southern stock exchange on Tuesday as the VN-Index of the Ho Chi Minh Stock Exchange (HOSE) dropped a whopping 61 points, with nearly US$1.1 billion in trade made over the course of the day.

Panic filled the HOSE as its benchmark index took a major plunge on Tuesday, with traders dumping their holdings while simultaneously bottom fishing for a good deal.

The market's free fall is a first for many in Vietnam, many of whom are new individual investors in the market.

Since early 2020, Vietnam’s newest generation of investors has pumped a great deal of cash into the stock market, helping the Vietnam Index to re-establish its 1,000-point mark.

However, Tuesday morning’s trading session saw the index drop 75 points at times, an unprecedented swing in the market’s history.

As bottom feeders began pumping money into collapsed stocks, the index perked up slightly.

Various blue chips and midcap stocks saw steep losses, including Vingroup (VIC), Vietcombank (VCB), Vinhomes (VHM), BIDV (BID), Vinamilk (VNM), PetroVietnam Gas (GAS), Vietinbank (CTG), Hoa Phat Group (HPG), Techcombank (TCB), and Vietnam Rubber Group (GVR).

Some, however, managed to rise over the day, including F.I.T. Group (FIT), Thanh Cong Textile (TCM), Garmex Saigon (GMC), and Saigontel (SGT).

By the end of the session, the VN-Index was down 60.94 points, or 5.11 percent, compared to its previous day close at 1,131.

With more than 986 million stocks traded, turnover on the Ho Chi Minh City bourse hit more than VND20.3 trillion (US$$880 million).

The VN30 Index, an index tracking the performance of the top 30 stocks for market cap and liquidity listed on the southern exchange, tumbled 66.02 points by end of the day to 1,107.32.

On the Hanoi Stock Exchange (HNX), the HNX-Index lost 6.48 points, or 1.3 percent, against the previous session, to the 224.02 mark, while the HNX30 – which tracks the movements of the 30 leading shares – skidded 23.58 points at 354.39.

The total trading volume on the three markets HOSE, HNX and the market for unlisted public enterprises (UPCoM), tallied almost VND25.5 trillion ($1.1 billion).

Over the past months, the VN-Index has consistently been on an upward trajectory, surpassing its previous high of 1,200 points.

Commenting on Tuesday’s market tumult, Huynh Minh Tuan, brokerage director of Mirae Asset Vietnam, said volatility of such scale was unexpected and might be attributable to a surge of “exit the market at all cost” mentality.

“Though anticipated, the extremities in this session are high enough to surpass the peak in the COVID-19 outbreak,” Tuan said.

According to Tuan, investors should consider this a chance to alleviate the pent-up pressure from the market, as the supply of stocks with profitability potential and margin funding is ample.

This will help break the state of gridlock as the VN-Index has entered the 1,200 resistance zone.

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