Local shares were not spared the sharp sell-off that shook global equities yesterday after US President Donald Trump vowed to slap tariffs on steel and aluminium imports next week.
The move sparked concerns over a potential trade war while fears of prices ratcheting up sparked heightened worries over inflation.
The key Straits Times Index shed 34.65 points or nearly 1 per cent to finish at 3,479.2 on Friday - its fourth straight day of losses.
Japan's Nikkei 225 fell 2.5 per cent, China's Shanghai Composite fell 0.6 per cent and the Hang Seng in Hong Kong slid 1.5 per cent. Key indices in Taiwan, South Korea, Australia and Malaysia were also awash in red.
Fears of faster interest rate rises in the United States had been uppermost in investors' minds but now trade concerns have stolen the fear limelight. Already trading partners like the EU and Canada have vowed to respond with firm action that could eventually disrupt trade flows.
Mr Trump's remarks also come amid worry and additional scrutiny of wage and price data with global markets on edge to see if inflation is about to creep up.
"A more insidious impact would be the negative hit on global trade flows, geopolitical tensions especially if the euro zone and China weigh in, and a resultant deterioration of investor sentiment. In such an environment, expect risk premiums to widen and EM/Asia to bear the brunt," said OCBC FX Research.
On the home front, turnover came in at 2.3 billion shares worth $1.3 billion, with losers outnumbering gainers 295 to 170.
Falls between 1 per cent and 1.4 per cent in all three banking stocks and a 0.3 per cent decline in Singtel dragged down the STI.
Venture Corp fell eight cents to $26.84 amid fresh buy calls by analysts since the information technology firm released a stellar set of fourth-quarter results on Wednesday. Said Maybank Kim Eng Research, the results "have strengthened our confidence" that Venture's ROEs (return on equity) have "shifted to a higher level". It raised the stock's target price to $31.20.
Conglomerate Keppel Corp retreated 1.8 per cent, Sembcorp Industries fell 1.6 per cent while Sembcorp Marine lost 2.9 per cent.
According to Trading Central, while a continuation of the STI consolidation cannot be ruled out, its extent should be limited.
Only two of the FTSE ST sector indices in the local bourse managed to keep their heads above water yesterday - the FTSE ST Catalist Index and FTSE ST Reit.