Analysts also see more headwinds for Singapore due to interest rates.
Bloomberg reports that trade tensions between the US and economic giants have jolted markets. The Straits Times Index (STI) fell 1.2%, indicating a drop from its May 2 peak to 10%.
The chill was also felt across other Asian markets as benchmark gauges in Malaysia, Vietnam and Thailand have already entered a correction, and the Philippine Stock Exchange Index slid into a bear market territory last week, holding on to its title of Asia’s worst market this year.
“Singapore has been hit because it is a liquid market where foreigners can pull out enough volume and at a quick enough pace,” said Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte. Teo sees “significant headwinds” for the rest of the year from prospects of higher rates and trade war concerns.
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.
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