Local investors kept their powder dry yesterday as they await the upcoming interest rate decision by American policy makers this week.
Meanwhile, oil prices slipped on news that Saudi Arabia's crude output could be restored by the end of this month although they remained elevated amid Middle East tension.
The end result left most Asian markets lower, including Japan, Australia, New Zealand, Hong Kong and Singapore while shares in China and South Korea gained.
The Straits Times Index (STI) here lost 0.51 per cent or 16.16 points to 3,166.84 with 905.12 million shares worth $914.04 million changing hands while losers outnumbered gainers 196 to 166.
Rex International led the actives as it has for the past two sessions but it retreated with the declining oil prices. It was down 5.38 per cent to 8.8 cents on trade of 60.4 million.
TEE International shot up 9.52 per cent to 4.6 cents on a volume of 54.3 million, while Yangzijiang Shipbuilding lost 2.78 per cent to $1.05 with 28.2 million shares traded.
Singapore Technologies Engineering was the top gainer among STI counters, improving 1.54 per cent to $3.96.
The firm said on Tuesday that its United States unit had acquired a firm specialising in solutions to reduce satellite interference and improve communications quality.
Mapletree Industrial Trust (MIT) rose 3 per cent to $2.40, after news the trust had priced an upsized $400 million overnight placement of units at $2.265 each.
Maybank Kim Eng research analyst Chua Su Tye has raised his target price on MIT to $2.50, saying on Tuesday that he favours the trust for its growth fundamentals "as DPUs (distributions per unit) are supported by recovering leasing demand in Singapore and a more resilient portfolio, given its high-tech asset investments and overseas diversification".
The rate decision expected from the US overnight highlights chairman Jerome Powell's unenviable position of trying to appease multiple parties, including the US President, who has called on the Fed to cut rates below zero, analysts said.
Mr Stephen Innes of AxiTrader said robust US industrial production numbers for last month and other supportive economic data gave the Fed "a perfect opportunity to walk down some of the market's dovish ambitions".
However, Oanda senior market analyst Edward Moya noted that the meeting could mark a turning point into more dovish territory, given risks that could see members supporting at least one more interest rate cut by the end of the year.
