The week got off to a flying start for Singapore equities following a surprise outcome from the Osaka meeting between the US and China.
But Monday's gains were followed by yesterday's flat session, with the Straits Times Index (STI) finishing 1.46 points or 0.04 per cent lower at 3,370.80.
Investors preferred to book profits as caution over the global outlook was further supported by disappointing economic data from the United States and China.
A trader said that with companies due to report second-quarter earnings, investors were using the rally as an opportunity to cash out first.
"We are also expecting light trading ahead of the US' July 4 holiday," he added.
IG market strategist Pan Jingyi said in the early session, the STI was "being suppressed on profit-taking and the revival of concerns on trade tensions and their implications on economic performance".
The index entered the midday break down 0.5 per cent.
Stocks fared better in the afternoon session after Australia's central bank lowered interest rates for the second straight month, bringing them to a historic low.
Perhaps, it is worth noting that Monday's rally came against a backdrop of a global economic slowdown, with volatility expected to continue.
In Singapore, trading volume clocked in at 1.05 billion securities, 88 per cent of the daily average in the first five months of this year.
Total turnover came to $973.56 million, 93 per cent of the January-to-May daily average.
Across the market, decliners trumped advancers 217 to 174.
Fourteen of the STI's 30 components finished in the red.
The local banks closed lower.
DBS Group Holdings lost 10 cents or 0.4 per cent to $26.50, OCBC Bank was five cents or 0.4 per cent down at $11.54 and United Overseas Bank finished at $26.55, down six cents or 0.2 per cent.
The cyclically sensitive manufacturing and semiconductor sector, which outperformed the STI on Monday, also ended lower.
Venture Corporation shares closed 32 cents or 1.9 per cent lower at $16.68, Hi-P International lost three cents or 2 per cent to $1.44 and AEM Holdings was down two cents or 1.9 per cent to $1.06.
Asia-Pacific markets experienced mixed results.
Australia, Hong Kong, Japan and Malaysia closed higher while China and South Korea were lower.