News that United States interest rates will stay put helped send local shares down a touch on the first trading day of the month, in line with most equity markets.
The Straits Times Index (STI) dipped 6.87 points, or 0.2 per cent, to 3,393.33 on trade of 878 million shares worth $1.11 billion, while losers outpaced gainers 218 to 192.
Market observers had speculated that the US Federal Reserve might cut rates, given recent low inflationary pressures, but the central bank shot down such talk on Wednesday when it held rates steady and hinted it was not considering cuts.
"Equity markets were looking for so much more from the Fed, and were shocked when chair (Jerome) Powell said the Fed did not see a convincing case to move rates in either direction," said Mr Stephen Innes, managing partner and head of trading at SPI Asset Management.
Reports also emerged that a US-China trade deal could be announced as early as next Friday, but this did not inspire risk sentiment.
"We suspect a sizeable chunk of trade deal risk boost is already baked in," Mr Innes added.
Shares here opened lower and failed to recover, with DBS weighing on the benchmark. It slid 2.3 per cent to $27.60, but OCBC Bank rose 0.33 per cent to $12.14 and United Overseas Bank added 0.07 per cent to $27.85.
OCBC Investment Research downgraded its call on DBS to "hold" on Tuesday, with a fair value of $29.18, after the stock rose on the back of better-than-expected first-quarter earnings. Its research head Carmen Lee suggested investors could buy into DBS if it hits $27.50.
STI decliners included Jardine Cycle & Carriage, down 2.11 per cent to $34.77, and Jardine Matheson Holdings, which fell 1.06 per cent to US$65.10. DBS Equity Research put a "buy" call and $39.10 target price on Jardine C&C on Tuesday, citing more attractive valuations for the share.
Seafood restaurant operator No Signboard Holdings was another decliner, down 2.35 per cent to 8.3 cents. Its chief executive Lim Yong Sim was arrested on Tuesday and released on bail. He has not been charged with any offence.
Contract manufacturer Hi-P International dipped 2.06 per cent to $1.43 before it announced a hit to gross profit from pricing pressures and product mix in the first quarter.
Hi-P has guided for lower revenue but flattish earnings in the second quarter and full-year numbers largely unchanged from last year.
Delong Holdings fell 1.8 per cent to $6, after the Chinese steelmaker said it expects to report lower first-quarter net profit, mainly due to a drop in average selling prices of products and higher cost of sales per tonne.