Continued trade tensions could hurt the gains today.
The Straits Times Index (STI) ended 28.34 or 0.88% lower at 3,181.45.
The FTSE ST Mid Cap Index fell 4.30% whilst the FTSE Small Cap Index slipped 4.25%.
The top active stocks were Chip Eng Seng, which dropped 10.05%, DBS, which slipped 1.16%, UOB, which fell 2.14%, Singtel, which slipped 0.31%, and OCBC, with a 0.08% fall.
According to OCBC Investment Research, the Dow Jones Industrial Average bounced back from earlier losses to finish higher, but the broader stock market closed lower as fears over rapidly rising rates continued to weigh on sentiment.
Five out of eleven S&P 500 industries ended lower, with Information Technology (-1.18%) and Health Care (-0.17%) leading the declines while Consumer Staples (1.34%) and Real Estate (1.32%) led the gains.
"Lacklustre performances on Wall Street overnight and continued trade tensions between US and China could cause the investors to remain cautious today," OCBC Investment Research said.
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