A sell-off on Wall Street overnight prompted local traders to exercise caution yesterday.
The wary mood left the Straits Times Index (STI) down 3.02 points or 0.1 per cent at 3,301.25.
Regional markets mostly sang the same tune, with Australia, China, Japan and Malaysia falling. South Korea was flat while Hong Kong inched up.
Investors were cautious ahead of the Group of 20 (G-20) summit in Osaka tomorrow, and the extent of possible rate cuts in the US.
Vanguard Markets managing partner Stephen Innes believes that risk sentiment in regional markets has yet to be "snuffed out", adding that "unlike the stampede into risk assets last week, not only has the dust settled, there are signs the market is taking on some risk insurance".
A remisier noted: "With news emerging around yesterday's close that the US Treasury Secretary believes a trade deal is 90 per cent complete, the bulls might have their way on Thursday."
Local activity was above average, with 1.27 billion shares worth $1.17 billion traded. Losers outpaced gainers 212 to 171 while half of the STI's 30 components fell.
With last week's rebound settling down, investors have moved back to adding defensive positions in telecoms and consumer staples.
IG market strategist Pan Jingyi said: "Even if we see some signs of improvement in US-China trade relations, the expectation that global growth will continue to taper boosts the attractiveness of defensives going into the second half of the year."
Singtel was the STI's most traded stock for a second successive session. It added 0.6 per cent to $3.50 on trade of 59.2 million.
Investors were buoyed by the telco noting in its annual report that it intended to monetise some loss-making digital investments.
Traders noted that a number of real estate investment trusts (Reits) have hit pricey valuations following the rally on expectations of US rate cuts, yet they continue to gain the attention of investors.
Google Asia-Pacific's decision to lease space at Alexandra Technopark from the first quarter of 2020 saw units in Frasers Commercial Trust jump 5.1 per cent to $1.66, their highest close since mid-September 2008.
Among tech stocks, Venture Corp continued to slide, with analysts lowering their price targets due to headwinds faced by the global manufacturing sector.
After losing 4.9 per cent on Tuesday, Venture extended its losses yesterday to close 2.7 per cent down at $16.02.