Investors hoping that the fairly positive end to last year's final trading day would continue into the new year had their hopes crushed, with Asian benchmarks ending in the red yesterday.
They are blaming it on the disappointing reading of China's Purchasing Managers' Index - or Caixin PMI - last month, as the lacklustre factory data suggests slowing growth in the global economy.
The December contraction is the first in 19 months reported by the private survey on manufacturing in the world's second-biggest economy.
IG market analyst Pan Jingyi told The Business Times: "We have seen the new orders component within the Caixin PMI declining, reflecting the poor demand conditions that had likely been a result of various growth stressors, including the US-China trade item.
"With the worries manifesting in economic indicators' showings, it is of little wonder we are seeing the market reaction today."
This weighed heavily on key Asian indexes, with the Hang Seng, Shanghai Composite Index, ASX 200, Kospi and Kuala Lumpur Composite Index all ending lower.
The Hong Kong market bore the brunt, with the benchmark index falling 3 per cent in early trading before closing 715.35 points, or 2.8 per cent, lower at 25,130.35.
Japanese markets are closed until tomorrow.
Negative sentiments also dented the US dollar as demand for safer investments sent gold prices to the highest since June 18 last year.
It traded at US$1,287.20 per ounce at 6.51pm yesterday.
Phillip Futures commodities analyst Benjamin Lu told Reuters: "It looks very optimistic and fundamentally supportive for gold as the overall mood is still very uncertain."
Singapore's Straits Times Index (STI) closed 29.87 points, or 0.97 per cent, lower at 3,038.89 as the miss in the fourth-quarter gross domestic product flash estimates pointed to a slowdown in global growth.
CMC Markets analyst Margaret Yang said: "Lower-than-expected fourth-quarter readings suggest Singapore's economy is moderating at a pace faster than the market had anticipated."
She noted that the markets have already reacted to the global slowdown, adding: "The question is how much more of a downside there is before we see a bottoming out."
Of the 30 STI constituents, 20 counters ended in the red. Turnover stood at about 1.46 billion shares worth $763 million.