SINGAPORE - Shares ended slightly lower as investors awaited a decision by the United States central bank for greater clarity on how it will move.
The Straits Times Index (STI) dipped 6.1 points or 0.2 per cent to 3,369.95 on Tuesday.
Stocks had initially opened higher, with the STI rising as much as 23 points, buoyed by Wall Street's overnight rally.
Both the S&P 500 and the Dow Jones Industrial Average jumped by 1.3 per cent and above on hopes that the US Federal Reserve could stay its hand in hiking interest rates due to poorer economic data.
The Fed began its two-day policy meeting last night with the latest report card on the economy showing that factory output fell in February for a third straight month.
Manufacturing data and homebuilders' confidence also fell.
Analysts still expect the Fed to drop the word "patient" when it comes to future interest rate hikes in its monetary statement.
But the negative data could delay expectations of an increase that some are predicting could happen in June.
"I'm not too sure if that is the kind of fuelled-rally I would like to see - one based on weak economic data and hence continued zero-interest rate policy," said Phillip Futures investment analyst Howie Lee in a note.
"I'd rather much data be strong, which even if it results in market dips due to fears over rate hikes, would present very good opportunities for entering in dips."