Hanoi - Vietnam's VN-Index fell 20.8 points Tuesday to close down 4.38 per cent at 455.95, as traders reacted to the collapse of two US investment banks, the threat to international insurance titan AIG Group and falling exchanges elsewhere in the world.

The Ho Chi Minh City exchange had bucked world trends Monday, rising very slightly while markets across the rest of Asia dropped sharply.

On Tuesday the market rejoined the rest of the world, as investors worried about the effects of turmoil in the economy of the United States, Vietnam's largest export customer.

"It's proof that Vietnam is not totally uncorrelated, at least in terms of sentiment," said Dominic Scriven of Vietnam-based portfolio investor Dragon Capital.

Vietnamese companies may be at bargain prices, Scriven said, but in the current environment "it would be a rash person indeed who rushed in to lock their liquidity in shares." (dpa)