Shares plunged March 14 on both national stock exchanges after rising for two sessions, erasing most of last week's gains, with 90 percent of codes dropping in value.
In HCM City, the VN-Index lost over 3 percent to finish March 14 at 479.9 points. Trading volume rose slightly to 45.6 million shares worth 932.2 billion VND (44.4 million USD).
Saigon Securities Inc (SSI) was again the most active stock with a whopping 6.8 million shares changing hands, closing up 0.9 percent at VND23,700 (1.13 USD).
Losers largely outnumbered gainers by 221-27, of which over half dropped to their floor prices including some of the largest capitalised shares such as Phu My Fertiliser (DPM), property developer Hoang Anh Gia Lai Co (HAG), industrial conglomerate Hoa Phat Group (HPG), financial Masan Group (MSN) and PetroVietnam Finance (PVF).
Among the 10 largest caps, only Vietinbank (CTG) made gains, rising 0.7 percent to close at 27,100 VND (1.30 USD), thanks to heavy purchases by foreign investors who bought 1.85 million CTG shares out of the total 2.14 million traded March 14.
Foreign investors have bought 6 million CTG shares in the first two weeks of March and analysts attributed this to an increased demand stemming from concerns that the stock was running out of room for foreign holdings.
Last week, International Finance Corporation (IFC), a member of the World Bank Group, bought a 10 percent stake in Vietinbank, and if it decides to offer a further 15 percent to the Bank of Nova Scotia in the third quarter, the remaining room for foreigners will be just 5 percent.
Foreign investors also finished March 14 as net buyers with a combined total of 100 billion VND (4.8 million USD) on both exchanges, the largest value this month.
In Hanoi, the HNX-Index lost 3.16 percent to close at 91.85 points.
Heavy profit taking in securities shares pushed market volume up by 64 percent to 48.3 million shares worth more than 730.1 billion VND (34.8 million USD).
Kim Long Securities (KLS) and VNDirect Securities Co (VND) were the most heavily-traded shares nationwide, with almost 7 million shares each changing hands. KLS lost 1 percent to close at 10,300 VND (0.49 USD) while VND rose 5.3 percent to finish at 15,800 VND (0.75 USD).
Decliners also largely outnumbered advancers by 258-39.
Bui Dinh Nhu, director of Corporate Finance Advisory of Vietnam Industrial and Commercial Securities Corp, said the earthquake followed by the tsunami that hit Japan late last week had a negative effect on domestic investors.
"Japan is one of the five biggest foreign investors in Vietnam as well as the country's biggest official development assistance donor. This devastating disaster will affect Japanese investment in Vietnam and their companies that operate here," Nhu said.
The last two sessions were also just a technical correction after a substantial decline on both indices, Nhu added, saying that investor psychology had not improved and there were no clear signs of the flow of money increasing into the securities market.