Local shares snapped four days of gains yesterday after fresh threats from United States President Donald Trump to widen the scope of tariffs on Chinese imports spooked investors.
The cautious mood sent the Straits Times Index (STI) down 2.98 points, or 0.1 per cent, to 3,090.40, with losers beating gainers 192 to 185 on trade of about 1.83 billion shares worth $1.04 billion.
Most other regional markets showed more resilience. Japan's Topix, propped up by financials and telecoms stocks, rose 0.7 per cent. Australia's benchmark ASX 200 was up 1 per cent, from a likely boost by oil price gains.
The exceptions were in China, where the CSI 300 slipped 0.1 per cent, and Hong Kong, which saw the Hang Seng Index fall 0.2 per cent.
Mr Trump said he would likely raise tariffs on US$200 billion (S$275 billion) in Chinese imports to 25 per cent from the current 10 per cent. He added that the US would impose tariffs on all remaining imports from China if talks with Chinese President Xi Jinping at the G-20 summit this weekend are unsuccessful.
"In general, risk sentiment is getting hit with a tonne of bricks driven by Trump's hardline immigration stance... and then backed up... by bellicose tariff comments directed at China," said Mr Stephen Innes, head of Asia-Pacific trading at Oanda.
"It doesn't sound like we will see Donald the Dealmaker but instead Trump the Trade Warrior at G-20."
Likewise, Phillip Futures investment analyst Samuel Siew noted that market sentiment remained jittery on US-China trade relations as there have not been high hopes of a positive outcome at the G-20 meeting between Mr Trump and Mr Xi.
Losses in offshore and oil-linked penny stocks also posed a drag on the local bourse as Brent crude fell 0.6 per cent to US$60.10 a barrel just after Monday's rebound.
Ezion Holdings lost 2.33 per cent to 4.2 cents with almost 50 million shares traded, while Rex International shed 2.86 per cent to 6.8 cents on trade of 48.69 million.
Spirit maker Thai Beverage also weighed on the STI, falling 5.97 per cent to 63 cents after posting weak full-year results on Monday night due to the slow Thai economy and rise in product prices. The counter has lost about 31.5 per cent this year.
In contrast, the three local banks - all STI heavyweights - ended the day with gains.
DBS Group Holdings closed up 0.47 per cent at $23.70, United Overseas Bank gained 0.69 per cent to $24.80, while OCBC Bank finished 0.54 per cent higher at $11.13.