The Straits Times Index closed 8.84 points higher at 3,049.90 on volume of 1.30 billion shares worth 1.41 billion Singapore dollars.

Rising issues led decliners 355 to 314, with 1,141 stocks unchanged.

The Fed, the US central Bank, was to meet on Tuesday and Wednesday.

Analysts had expected the Fed to trim at least another quarter point off its key federal funds interest rate, the bank-to-bank overnight lending rate, but there was growing talk of a 50 basis points cut to 3.00 percent.

The rate is currently 3.50 percent after an emergency 0.75 percentage point cut last week in a move aimed at calming global financial markets roiled by fears of a widening US recession.

The benchmark Straits Times Index had traded 1.4 per cent higher in the morning but investors turned cautious with concerns over the US economy returning to the fore, dealers said.

'We are in an uncertain environment where investors will take a short-term trading view,' said Song Seng Wun, regional economist at CIMB-GK Research.

'The uncertainty and risk factors have increased. So investors are more trading-oriented, where basically you make some money and run.'

Banking shares traded flat, with United Overseas Bank gaining six cents to 17.56 Singapore dollars. DBS Group closed unchanged at 18.06 and Oversea-Chinese Banking Corp was steady at 7.60.

Property stocks were mixed, with City Developments dropping 26 cents to 11.94 and CapitaLand down 10 cents at 6.15. Keppel Land gained two cents to 6.45.

Among blue chips, Singapore Telecommunications gained four cents to 3.68 while Singapore Airlines declined 38 cents to 15.62. -- AFP