With Peebles having also started with three wins, the Reds travelled in anticipation of their toughest test so far.
But Newton Stewart were first on the scoresheet first with a superb team try, the ball moved through the backline from the right touchline to the left until winger Jamie Muir touched down in the corner.
An excellent conversion by stand-off David Gaw from a difficult position saw the Reds 7-0 up with just five minutes played.
For the next 10 minutes Newton Stewart had to defend their line ferociously to keep the home team out, but eventually gave away a penalty in front of the posts which Greg Raeburn slotted over.
Peebles then found a gap in the Reds defensive line and David Collins went over for a try converted by Raeburn to leave the Reds 10-7 behind at the break.
Another Raeburn penalty after the interval extended their lead, but Newton Stewart responded in style as full-back Russell Morton made a superb break, side-stepping multiple Peebles players on route to a glorious solo try which Gaw converted to push the Reds ahead once more, 14-13.
The pace was frantic and Peebles snatched the lead back with another well worked try Euan Jackson try, converted by Raeburn.
But once more the Reds hit back, Mark McCornick running straight through the ruck before passing the supporting skipper Fraser Morton who scored under the posts. Gaw converted and the visitors were back in front.
However the Peebles forwards were beginning to dominate the scrums and back-to-back close range tries from Jackson and Donald Anderson, the first converted by Raeburn, put them 32-21 ahead with a try bonus point also secured.
But Newton Stewart refused to give up and were rewarded when a great forwards move put hooker Thomas MacDonald over the line in the corner to secure both a try bonus and a losing bonus point.
Although the end result was Newton Stewart’s first loss of the season, it was an excellent performance on the road against a difficult team and they can take a lot of positives away from this match.
Next up this Saturday is a home match with Stewart’s Melville.