The Ho Chi Minh Stock Exchange's VN Index rose in a technical recovery, driven mainly by blue chips, as cash inflows weakened ahead of a major festival next month and due to the uncertainty of bank risk provisions, analysts said.
The index was up 1.49 percent at 449.97 at the close of the morning session.
Gains by major listed firms including Bao Viet Holdings , Petrovietnam Gas Corp, Sai Gon Securities Incorp and Vinamilk provided support to the index.
'Shares rebounded technically with a low volume as buyers were cautious and sellers hesitated to sell,' said analyst Doan Tran Anh Nguyet at Saigon Hanoi Securities.
Traders were uncertain about a central bank requirement on banks' risk provisions, which may affect cash inflows, Nguyet said.
Banks in Vietnam will have to set aside more money from June to safeguard against non-performing loans, the central bank said.
Several investors have stopped trading to prepare for Tet, said broker Tran Xuan Phu at Ho Chi Minh City Securities, referring to Vietnam's biggest festival to mark the Lunar New Year that starts in early February.
'The markets could drop further as not many fresh supportive news could emerge in the short term, while Tet is approaching,' analyst Tran Minh Hoang at Vietcombank Securities said.
1149 (0449 GMT)
(Reporting by Hanoi Newsoom; Editing by Anupama Dwivedi) Keywords: MARKETS VIETNAM STOCKSNEWS/
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