Hanoi- Vietnam's stock market Thursday fell to its lowest level since December 2005, after state media reported that ongoing losses had driven several securities firms to the verge of bankruptcy.

The VN-Index ended the day down 2.9 per cent, or 8.3 points, to close at 277.8, the lowest level since December 29, 2005.

Market volume was just 6.8 million shares, valued at 146 billion dong (8.3 million dollars). It was the fourth consecutive drop since trading resumed after Vietnam's lunar New Year.

"Traders are very pessimistic about the results of listed companies and their business prospects this year," said Dao Viet Anh, an analyst at FPT securities in Hanoi.

Anh said only about 10 percent of Vietnamese companies had reported profits in the fourth quarter of last year, and several had reported large losses.

The State Bank of Vietnam cut the prime interest rate from 8.5 to 7 per cent on Sunday, but had little effect on market sentiment.

"Many traders thought that when the 300 point psychological support level was breached on Monday, it meant the market would drop further, so they decided to sell stocks in the hope of buying them back cheaper in the future," said Nguyen Thanh Hai, a trader at Saigon Securities Incorporated.

Vietnam's stock market has lost 12 per cent of its value already this year, after dropping by 65 per cent in 2008. It peaked at 1,174 in March 2007. (dpa)