The mood around the globe might have improved in recent days, but that failed to lift sentiment among local investors.
While many traders were focusing on the record highs on Wall Street overnight, souring relations between China and the United States remained on the radar.
The latest salvo out of Washington came in the form of a warning to colleges and universities to sell any Chinese holdings in their endowments owing to proposed rules that could see the firms delisted.
US President Donald Trump said on Tuesday that he postponed trade talks with China originally scheduled for last weekend, adding that he "(doesn't) want to talk to China right now".
The uncertainty left the Straits Times Index (STI) down 2.05 points, or 0.08 per cent, at 2,561.04, with losers outnumbering gainers 248 to 171 on trade of 1.85 billion shares worth $1.12 billion.
Wilmar International was the top gainer, up 1.89 per cent to $4.86. The agri-business group is listed as one of RHB's top buys. It noted that Wilmar's "diversified business with exposure to consumer-pack products helps to offset weakness in other businesses", and that the potential initial public offering of Yihai Kerry Arawana - Wilmar International's Chinese unit - "by end-2020 is a key catalyst".
Singapore Airlines was at the bottom of the STI's performance table, declining 2.69 per cent to $3.62. This comes as the group said on Tuesday that travellers from nine new cities can now transit through Singapore. It is also increasing the frequency of selected services in its passenger network over the next three months.
Asian markets similarly bucked the trend of the Wall Street rally.
The Jakarta Composite Index dipped 0.42 per cent, while the benchmark Shanghai Composite dropped 1.24 per cent as China-US trade tensions continue to escalate.
The Hang Seng Index eased 0.74 per cent, with trading cancelled in the morning owing to a strong typhoon in the city.
But Japan's Nikkei 225 Index ended its two-day decline and rose 0.26 per cent.
Investors searching for fresh catalysts to risk assets are keeping watch on US fiscal stimulus talks and waiting for the Federal Reserve to release minutes of a July committee meeting, which may give clues about inflation targeting.
"We have a Federal Reserve that is all in, keeping rates low probably across the curve for as far as the eye can see," Ms Katie Nixon, chief investment officer at Northern Trust Wealth Management, told Bloomberg TV. "That is supportive of higher valuations."
• Additional reporting by Bloomberg
