Vietnam Stock Market Slumps 5.5% in Biggest Drop in Six Months

Vietnam’s benchmark equity index plunged by approximately 5.5% on Monday, marking its steepest one-day fall in about six months. The sharp decline was triggered after regulatory authorities unveiled alarming irregularities in the country’s corporate bond market, undermining investor confidence.

According to reports, the national regulator found widespread misuse of bond proceeds, disclosure lapses and delayed interest payments among dozens of issuers. The resulting risk awareness spurred heavy selling across sectors — from real estate to banking. Shares of prominent groups led the sell-off as market participants reassessed the credit outlook.

Trading volumes surged to their highest level in a month as the benchmark index closed near its lowest level in recent weeks. While Vietnam’s economic fundamentals remain intact, analysts say the valuation stretch from a sustained rally made the market vulnerable to any trigger. The sharp correction may pave the way for a healthier base, yet there remains a possibility of continued volatility until clearer signals emerge.

Investors will now be watching closely for government intervention, corporate bond clean-ups and signals of renewed foreign inflows. The drop serves as a reminder that even in high-growth economies, credit shocks and structural risks can quickly translate into broader equity stress.

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