Vietnamese shares joined those on other Asian markets yesterday as they experienced the hardest fall since the beginning of the year, dragged down by the latest Chinese stock rout.

China's Shanghai Composite Index sank the most since 2007, diving 8.5 per cent to close at a six-month low. Stocks exchanges in the region from Japan to Indonesia were also hit hard following the Chinese stock crash.

In Viet Nam, the benchmark VN-Index on the HCM Stock Exchange also dived more than 29 points, or 5.28 per cent, to close yesterday's session at 526.93 points, slightly above the yearly bottom of 518.22 seen on December 17, 2014.

This was the second time the VN-Index has dropped more than 5 per cent during its 15 years of operation. The first time happened on May 8 this year during the territorial dispute between Viet Nam and China on the East Sea.

On the Ha Noi Stock Exchange, the HNX-Index also lost 5.81 per cent to end the session at 73.09 points. About VND64 trillion (US$2.84 billion) evaporated from the two exchanges yesterday. Shares in the HCM City market lost VND56.6 trillion ($2.5 billion).

"There was no additional negative information in the domestic market. Investors panicked about bad news on the global stocks and oil markets," said Bui Nguyen Khoa, an analyst with BIDV Securities Co.

Brent and US crude oil futures hit a six-and-a-half year low as concerns about a global supply glut added to worries over potentially weaker demand from China. Meanwhile, about $5 trillion has been washed out from global stocks in almost two weeks since China devalued its currency.

Oil and gas companies in the domestic market were also hit hard. PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Drilling Mud (PVC) and PetroVietnam Coating (PVB) all dropped by the daily limit of 7-10 per cent.

The overall market atmosphere was pessimistic as nearly 70 per cent out of a total of 674 stocks declined (of which 180 fell the highest percentage allowed by the authority). Only 53 shares, or 8 per cent, climbed.

More than 245 million shares worth over VND3.8 trillion ($168.9 million) were traded by the end of the session on the two bourses, down 2 per cent in volume but up 9 per cent in value compared with Friday's levels.

According to Khoa, it would be too hasty to confirm the market bottom now and the market could be volatile in the next sessions. "If the selloffs continue like today, the VN-Index may retreat to around 500 points," Khoa said.

However, he said now was a big opportunity for investors in the medium term as the current value was in a very low range. Price-Earning ratio (P/E) of the VN-Index was around 10 while PE of the HNX was nine, one of the lowest in the region.

Foreign investors returned as net buyers in the two markets yesterday, ending a seven-day net selling streak. They picked up shares worth a combined VND186 billion ($8.3 million) on the two exchanges after unloading a total net sell of around VND700 billion ($31.1 million) in the last seven sessions.

VNS