Hanoi - Vietnam's stock market fell sharply Tuesday as local traders scrambled to sell following Monday's plunge in the US stock market.

The VN-Index shrank 22.3 points, or 4.66 per cent, to close at 456.

Vo Quoc Khanh, an analyst at FPT Securities, said local traders were "shocked to learn that US lawmakers had rejected the 700 billion dollar financial rescue plan."

Khanh said traders sold across the board, afraid falling global indexes would have a negative impact on Vietnam's market.

Liquidity dropped sharply with just over 4 million shares traded, valued at 181 billion dong (10 million dollars), the lowest levels in the past two months.

"Beside the bad news from the US, many local investors rushed to sell because they had reached an acceptable profit level," said Le Van Cuong, Vice Director of APSC Securities.

Nguyen Thu Huong, a trader at Kim Long Securities, said few traders bought on Tuesday because they predicted the prices of shares would continue to fall over the next few days. Huong said traders were worried about a deeper crisis in world financial markets. (dpa)