Asian stocks were rattled yesterday amid rising US Treasury yields and a troubling report about China infiltrating American companies with a microchip.
US Treasury yields have hit a seven-year high and they continued rising, lifted by robust United States economic data and hawkish comments from the Federal Reserve.
A surging US economy has paved the way for the Fed to keep raising interest rates.
Fed chairman Jerome Powell said the Fed had a long way to go before interest rates hit neutral, suggesting more interest rate hikes could be on the horizon.
The Nikkei slipped to close at its lowest in two weeks yesterday, tracking the previous day's weakness on Wall Street. It ended 0.8 per cent lower after having hit a 27-year high earlier in the week.
Hong Kong's Hang Seng closed at its lowest in nearly four weeks, dragged down 0.19 per cent by technology shares and renewed concerns over the US-China trade war.
Asian tech stocks were another drag on bourses, after shocking revelations that a tiny microchip - "not much bigger than a grain of rice", according to Bloomberg Businessweek, which first reported the story - had been inserted possibly into innumerable servers around the world, in a move that could potentially compromise national security and company secrets.
In Singapore, the key Straits Times Index dipped to an intraday low of 3,198.72 before settling at 3,209.79, down 21.8 points or 0.67 per cent. The index is down 1.65 per cent for the week.
Losers heavily outnumbered gainers 243 to 125, on turnover of 1.55 billion shares worth $936.2 million.
The most actively traded counter was Advanced Systems with 139.4 million shares changing hands, flat at 0.1 cent. Thomson Medical was the second-most traded with 116.67 million shares, up 4.82 per cent to 8.7 cents.
Among active index stocks, OCBC Bank shed 0.89 per cent to $11.19, while Singtel dipped 0.93 per cent to $3.21.
The news of the server hack kept local tech counters depressed. AEM Holdings, which provides handling solutions to electronics manufacturers, slipped 1.82 per cent to 81 cents, while contract manufacturer Hi-P fell 3.81 per cent to $1.01.
Bloomberg also reported yesterday that index provider FTSE Russell has introduced an index to track syariah-compliant companies on the Singapore Exchange, giving global investors more options in the city's equity market.