(Bloomberg) -- Singapore stocks declined, with the nation’s benchmark index entering a correction, as the continued trade tensions between U.S. and China triggered a selloff across Asia.

The Straits Times Index dropped 1.1 percent at 3:20 p.m., taking its decline to 10 percent from its May 2 peak.

Trade tensions between the world’s two-largest economies and rising interest rates have jolted markets, along with worries over higher oil prices. Singapore joins Malaysia, Vietnam and Thailand to enter a correction. The Philippine Stock Exchange Index slipped into a bear market territory last week, holding on to its title of Asia’s worst market this year.

“There are significant headwinds in the second half of this year,” including an accelerated rate hikes and concerns over trade skirmishes between U.S. and China, said Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte. “Singapore has been hit because it is a liquid market where foreigners can pull out enough volume and at a quick enough pace.”

Morgan Stanley strategist Jonathan Garner wrote that deteriorating economic backdrop amid Fed tightening, weaker liquidity in China, strengthening dollar and escalating trade tensions between U.S. and China, have led to significant downgrades in index targets across Asia.

Singapore has highest proportion of stocks in oversold territory in at least a year, data compiled by Bloomberg show.

Read more: What’s wrong with Asian stocks as analysts weigh in

--With assistance from Livia Yap.

To contact the reporters on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net;Kintan Andanari in Singapore at kandanari@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Ravil Shirodkar

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