The regional rebound that cheered investors on Monday ran out of steam yesterday as doubts emerged that the trade war was entering a ceasefire.
Market confidence remained fickle in the light of conflicting information coming from top officials in the Trump administration.
While United States President Donald Trump tweeted that China agreed to reduce and remove tariffs on car imports from the US, Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow were not able to confirm the move.
FXTM chief market strategist Hussein Sayed said: "Such inconsistent messages will leave markets guessing and struggling to reach a conclusion."
CMC Markets analyst Margaret Yang said the focus has shifted back to fundamentals, with recent purchasing managers' index figures suggesting that global demand is weakening.
Asian markets mostly closed lower, but the Hang Seng rose 0.29 per cent and Shanghai shares added 0.42 per cent.
The Nikkei, ASX 200, Kospi and Kuala Lumpur composite all fell.
The Straits Times Index (STI) was in line with regional peers and closed down 22.83 points, or 0.72 per cent, at 3,167.79. Turnover was 1.49 billion shares worth $1 billion, with losers beating gainers 281 to 108.
Thomson Medical Group was the bourse's most actively traded stock but ended flat at 8.2 cents on turnover of 76 million shares.
Genting Singapore was the most active STI stock, falling 1.9 per cent to $1.02 with 38.6 million shares changing hands. Singapore Airlines was the STI's biggest gainer, up 0.4 per cent to $9.56.
In percentage terms, Yangzijiang Shipbuilding reversed gains made on Monday to close 4.6 per cent down at $1.24.
Among financials, DBS Group Holdings dipped 0.6 per cent to $24.96, OCBC Bank dropped 0.4 per cent to $11.55, while United Overseas Bank lost 0.8 per cent to $25.78.
ComfortDelGro continued to fall with Indonesian ride-hailer Gojek's impending entry here this week. It closed 1.4 per cent lower at $2.12.
KGI Securities analyst Joel Ng said the sell-off may be overdone, given the transport firm's strong balance sheet and recurring cash flow.
IG sales trader Jayden Loh said: "Until we have clarity on the trade deals, markets would be volatile and quick to react to any major updates coming from both countries (US and China). As we head into the festive season where volumes tend to be lower, we might see even more erratic movements."
