By Thuy Trieu - The Saigon Times Daily
HCMC – The stock market on Tuesday took a nosedive as earlier expected due to strong profit taking pressure, with the VN-Index dropping 15.78 points, or 2.96%, from the session earlier to 516.08.
The loss in one session on Tuesday erased all the gains made last week. Investors bid for 96.8 million shares, rising 3% from the session earlier, while they offered 123.3 million shares, up 19.3%. 
Despite the sharp fall, liquidity was a spotlight of the day. At the end of the session, the market’s total trading volume was 67.3 million shares worth VND2.9 trillion, rising 19% and 23% respectively from the session earlier.
The market fell from the open and then dropped steadily throughout the day before finally closing at the lows. The market saw 20 stocks gaining and 187 others falling, with six stocks rising to the ceiling prices and 48 others dropping to the floor prices.
In terms of the VN-Index, penny stocks of TKH, AGR, and DQC made the biggest positive contribution while large cap ones of VCB, CTG, and BVH made the biggest negative contribution. Banking stocks continued to lead the market in terms of liquidity.
Sacombank (STB), dropping 2.94% to VND23,100 per share with volume of 3.3 million shares, was the most actively traded stock on the bourse, followed by Saigon Securities Inc. (SSI), which lost 2.2% to VND89,000 per share with 3.23 million shares traded.
Foreign investors trade was fairly balanced as they bought 1.64 million shares worth VND84.7 billion, falling one-third from the session earlier, while they sold 1.7 million shares worth VND76 billion, up 19%.
Fiachra Mac Cana, managing director of Hochiminh City Securities Co. (HSC), said that the markets fell rather unexpectedly as media stories of likely petrol price increases renewed inflationary worries and damaged investor sentiment. Turnover was quite high as offers surged and took out bids on the way down, he added.
The 2010 inflation is going to be higher than last year and also above the government’s low target of 7%, Mac Cana said, adding that his long standing target would be about 11.5% by year-end.
“However despite all the scare stories we are not in an inflationary spiral and higher petrol or utility prices will not have a major impact on the consumer price index (CPI) by itself. Their weight in the CPI basket is not that significant,” he said.
He noted that “therefore we see today’s weakness as providing an unexpected but welcome buying opportunity for investors.”
Meanwhile, Thanh Cong Securities Co. in its daily report said the VN-Index would continue falling today given the strong selling pressure on Tuesday. However, the broker expected that the level 506 points would be the supporting level for the index today.
Similar to the southern bourse, Hanoi market fell 4.65 points to 168.67. The market’s total trading volume was 40.3 million shares worth VND1.4 trillion, both rising 12% from the session earlier.
There were 60 stocks rising and 196 others plunging, with 11 stocks hitting the ceiling prices and seven tumbling to the floor prices. Foreigners turned net sellers on the bourse to the tune of VND180 million worth of shares.