Profit-taking and a lack of direction combined to send local shares down yesterday, threatening a downbeat end to the year.
The benchmark Straits Times Index lost 18.84 points or 0.55 per cent to 3,416.94, leaving it down about eight points for the week.
Much of the decline can be chalked up to the banking stocks.
DBS, OCBC and UOB lost over 13 index points between them.
DBS shed 40 cents or 1.6 per cent to $24.58, OCBC ended down one cent to $12.30, while UOB dipped 36 cents to $26.05.
Analyst Margaret Yang of CMC Markets Singapore said: "The market is lacking fresh catalysts as we are getting close to the year end, and profit-taking kicks off following the astonishing rally this year, particularly among bank shares.
"Singapore banks' dividend yield has dropped to their lowest in nearly a decade - a warning signal that the current valuation is rich and such low yield is no longer attractive to value investors."
Wall Street fell overnight following news that Republican Senator Marco Rubio may vote against a final tax-cut deal if certain demands were not met, while at least two other party members are uncertain.
IG market strategist Pan Jingyi said: "With the tax vote nearing, the growing list of wavering lawmakers does add a degree of uncertainty, and given the way we have seen markets react overnight, an even more drastic response next week should not be ruled out."
Indices in Japan, Hong Kong, Malaysia and Australia ended lower, while New Zealand and Seoul finished higher. In the local market, turnover came in at 1.5 billion shares worth $1.3 billion, with losers trumping gainers 209 to 173.
Singapore Airlines retreated from the day's high to finish one cent lower at $10.51, after news that it is rolling out new airfare pricing.
NetLink NBN Trust rose half a cent to 82.5 cents. Last month, it posted a better-than-forecast net profit of $12.99 million in its first financial period ended Sept 30.
Thai Beverage added 1.5 cents to 97 cents with 27 million units traded. The company has until Dec 18 to submit a bidding price for Saigon Beer Alcohol Beverage Corp, in a deal estimated to be over US$2 billion (S$2.7 billion).
Mr Ricky Chau, Franklin Templeton's multi-asset solutions portfolio manager, said uncertainty may rise next year. He suggested that holding cash might allow investors to benefit from rising real yields, but also leave them vulnerable to any decline in inflation.