Fears that China could slow the pace of policy easing following a better-than-expected economic performance jolted investor confidence across the region yesterday.
The market is viewing the developments with a hawkish tinge following a week of robust Chinese data, said Mr Stephen Innes, SPI Asset Management's managing partner and head of trading.
The Straits Times Index (STI) responded by dipping 4.23 points or 0.13 per cent to 3,353.47 while Shanghai closed down 0.5 per cent.
Trading here clocked in at one billion securities worth $886.18 million, with losers outnumbering winners 228 to 165.
IG market strategist Pan Jinyi said: "I would not read too much into the performance, with low volume trading in the local market, as investors were likely to have stayed on the sidelines awaiting fresh impetus to trade."
The energy and offshore and marine sectors bucked the trend to outperform the benchmark index.
Sembcorp Industries rose 1.1 per cent to $2.76, SembMarine added 4.7 per cent to $1.79 and Rex International advanced 2.5 per cent to 8.1 cents.
The counters were given a lift after the United States announced the end of Iran sanction waivers from May 1. That promises a supply squeeze and sent oil to six-month highs during the Asian session.
Oil prices may yet increase further with Iran threatening to blockade the Strait of Hormuz in order to stop the flow of seaborne crude exports from the Middle East.
Thai Beverage was one of the 15 STI components to end in the black.
It was also the blue-chip index's most traded for the second session running as it added 0.6 per cent to 83.5 cents with 44.96 million shares changing hands.
Meanwhile, CapitaLand slid 2.8 per cent to $3.54.
Mr Brandon Leu, vice-president of equities and financial products at UOB Kay Hian, said investors were "probably selling after booking the dividends as CapitaLand trades ex-dividend (on Tuesday)".
CapitaLand said yesterday that it was divesting its self-storage business StorHub for $179.5 million.
The local banks were mixed. DBS closed 0.1 per cent down at $27.42 while OCBC put on 0.4 per cent to $11.83 and United Overseas Bank added 0.1 per cent to $26.99.
A trader noted that the local banks and big-cap index stocks were already trading at "toppish" levels after rallying this year, which could explain why some investors took to booking profits.
"I anticipate that more investors will be exiting positions in May," he added.