SINGAPORE - Asian markets took a step back Wednesday amid heightened geopolitical tensions after Turkey shot down a Russian fighter jet.
Singapore shares also took a hit. The Straits Times Index slid 31.91 points, or 1.09 per cent, to 2,891.58, the region's worst performer.
This was even as official data showed that the economy had narrowly averted a technical recession in the third quarter, thanks to a strong performance in the services sector.
The Government's growth forecast for the full year, however, has been adjusted downwards to "close to 2 per cent", lower than the earlier projection of 2 to 2.5 per cent.
Most other markets in the region were similarly kept on edge, with Tokyo and Hong Kong both dropping 0.4 per cent each, while Seoul slipped 0.3 per cent, snapping a four-day winning streak.
"A spreading and escalation in recent terror attacks and now the downing of a Russian warplane by Turkey are raising concerns of the possible unforeseen spillover impacts of Middle East conflicts," said Mr Con Williams, an economist at ANZ Bank New Zealand, in a note, Bloomberg News.
"The accumulation of these events is now beginning to have an influence on global markets."
Bucking the trend was Shanghai, which rose 0.9 per cent as traders piled into technology stocks, following a series of government policies to promote innovation and entrepreneurship.
Overnight, Wall Street also managed to shake off worries over the downing of the plane, edging up 0.1 per cent on the back of a surge in energy shares.
The losses at home yesterday were led by telco giant Singtel, which fell seven cents or 1.8 per cent to S$ 3.80.
The local lenders also dragged down the index, with United Overseas Bank sinking 29 cents or 1.5 per cent to S$ 19.60. DBS Group Holdings lost 19 cents or 1.1 per cent to S$ 16.72 and OCBC Bank dipped six cents or 0.7 per cent to S$ 8.80.
Commodity trader Noble Group remained under the weight of news that Standard & Poor's may cut its debt rating to junk on liquidity concerns, dropping half a cent 1.2 per cent to 40 cents.
Outside of the blue chips, shipper Neptune Orient Lines continued to grow steadily, rising three cents or 2.5 per cent to S$ 1.22.
The firm announced at the weekend it was in exclusive talks with CMA CGM, the world's third largest container shipping company, on a possible buyout.
Cord blood banking firm Cordlife also fared well, jumping 10 cents or 8.2 per cent to S$ 1.32.
Offshore services provider Ezra Holdings was the day's most active counter, with 48.6 million shares being traded. It gained 0.1 cent or 0.9 per cent to 10.9 cents.
Trade across the bourse was 984.7 million units worth S$ 1.05 billion.