Heightened trade tensions did the expected yesterday and sent shares crashing across the region, leaving the local benchmark in the red for the year.
The jittery mood left the Straits Times Index (STI) down 45.02 points, or 1.45 per cent, to 3,065.33 - below last year's close of 3,068.76.
Markets in Australia, China, Hong Kong, Japan, Malaysia and South Korea all faced sharp sell-offs at the opening bell, although there was some recovery towards the close.
The Hang Seng fared the worst, shedding 1.9 per cent. Hong Kong stocks were dealt a double blow with US-China trade tensions and violent protests in the territory.
Last week's main event, US Federal Reserve chairman Jerome Powell's speech at Jackson Hole, is far from the minds of investors.
DBS Equity Research analyst Yeo Kee Yan noted the latest exchanges on trade "wiped out Fed chair Powell's efforts to calm markets as he vowed to act to continue US economic expansion at Jackson Hole".
There is still hope that the two nations can work towards talks.
Mr Trump said yesterday that Beijing called Washington in a bid to restart negotiations, while Chinese Vice-Premier Liu He also made reassuring noises.
Trading here clocked in at 1.58 billion shares worth $1.11 billion, with losers outpacing gainers 332 to 119.
Only two STI counters - Yangzijiang Shipbuilding and CapitaLand Commercial Trust - ended in the black. Yangzijiang rose 3.3 per cent to 94.5 cents on trade of 43.6 million - the index's most active.
Risk-averse investors sent the banks down. DBS lost 1.2 per cent to $24.09, OCBC Bank fell 0.9 per cent to $10.54, and United Overseas Bank dipped 0.8 per cent to $24.45.
Renewed fears of a global recession on the back of the worsening trade dispute sent five STI components to multi-year lows.
Sembcorp Industries fell 3.6 per cent to $2.13, Singapore Press Holdings dipped 2.5 per cent to $1.99, Singapore Airlines lost 0.3 per cent to $8.86, Hutchison Port Holdings Trust slipped 6 per cent to 15.7 US cents, while the Jardine group's Dairy Farm International was off 1.7 per cent at US$6.80.
Yesterday's sell-off showed that even defensives were not immune. Sheng Siong edged down 0.9 per cent to $1.15.
That said, some real estate investment trusts, key beneficiaries of an increasingly benign interest rate environment, posted gains.
Mapletree Commercial Trust added 1.4 per cent to $2.16, and Frasers Commercial Trust advanced 1.9 per cent to $1.63.
