Hanoi - Vietnam's stock market fell sharply on Thursday as local traders scrambled to sell after the previous day's plunges on the global market and on fears that foreigners will withdraw from the local exchange, securities experts said.

Despite prime rate cuts by the State Bank of Vietnam (SBV) from 14 to 13 per cent last Tuesday, the volatile VN-Index ended Thursday down 3.86 per cent, to close at 360, the lowest level since February 2006.

"Local traders' sentiments have been badly affected by plummets on global stock markets," said Phan Hong Quan, Director of Eurocapital Securities. "That fact that foreigners were net sellers over the past ten sessions has made local traders worried."

Nguyen Thu Hang, a trader at Alpha Securities, said traders were very cautious at this time and they did not want to buy because they were fearful that the share price would keep falling over the next few days if foreign players continued to cash out.

However, some stock analysts said that local traders have responded excessively because Vietnam's general economy has been improving, with most listed companies reporting good financial reports in the first three quarters.

"The prices of shares are very attractive now, it is an excellent and unbelievable opportunity for traders to keep good stocks for long term investment," said Dao Viet Anh, an analyst at FPT securities. (dpa)