System errors are not to blame for the markets’ steep fall on Tuesday, the Ho Chi Minh Stock Exchange has said, while analysts attributed it to panic selling.
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The VN-Index’s 56-point fall to 1,355, its lowest level in over three weeks, following strong selling pressure in the last 30 minutes of trading, sparked rumors of a system fault.
But Le Hai Trai, the bourse’s CEO, dismissed this, telling VnExpress that the new system developed by tech giant FPT did not encounter any error.
“The system handled over one million transactions on Monday and 970,000 on Tuesday, both greater than the maximum capacity of the old system.” And, it is capable of handling much higher numbers, he assured.
Analysts said an overreaction by retail investors could be the main reason for the loss.
Nguyen The Minh, head analyst at brokerage Yuanta, said 90 percent of trading is by foreign investors, and recent rumors about the Covid-19 pandemic have worried them.
Hoang Huy, chief analyst at KIS brokerage, said many investors who use margin and have achieved high profits choose to sell when the market shows signs of negativity.
But brokerages expected the index to recover in the upcoming sessions as it reaches support levels.
Brokerage SHS forecast it to move within the 1,325–1,380 range on Wednesday.
KB Vietnam expected the index to fall to the support range of 1,315–1,320 points before bouncing back.
“The index will be more stable when it hits 1,320 points,” Minh said, pointing out that some banking stocks, which have been driving the market, attracted buying on Tuesday amid the selling spree, and would slow the fall in the coming sessions.