An interpretation of the transport and magnetic relaxation properties of underdoped cuprates based on the recently proposed U(1)×SU(2) Chern-Simons gauge field theory is proposed, which takes into account the short-range antiferromagnetic order. The interplay of the doping-dependent spin-gap (explicitly derived by us) effect and dissipation due to gauge fluctuations gives rise to a crossover from metallic to insulating behaviour of the conductivity as temperature decreases, in semi-quantitative agreement with experimental data. For the same reason the magnetic relaxation rate shows a maximum nearby. Various crossover temperatures related to spin-gap effects are shown to be different manifestations of the same energy scale.