The main Straits Times Index tumbled 46.26 points to 2,792.75 on volume of 1.26 billion shares worth 1.53 billion Singapore dollars.

Decliners led rising issues 532 to 161 with 969 issues unchanged.

Investor confidence was battered following the near-collapse of investment bank Bear Stearns which underlined the US financial system's exposure to the subprime mortage crisis, dealers said.

The US Federal Reserve's emergency move to cut rates in a rare Sunday announcement underscored the extent of the problems facing the world's largest economy due to a housing slump and credit crunch sparked by a wave of defaults on subprime, or high-risk, mortgages, they said.

'The negative news flow that has affected equity markets has yet to run its course and investors should avoid taking large positions until after April, when a clearer picture of the US economy emerges,' said DBS Vickers in a note.

Property heavyweights led the decline, with CapitaLand shedding 21 cents to 5.55 dollars, City Developments sank 41 cents at 9.99 dollars and Keppel Land lost 25 cents to 5.00 dollars.

Banking shares also retreated, with DBS Group down 16 cents at 16.70 dollars, Oversea-Chinese Banking Corp dropped seven cents at 7.52 dollars and United Overseas Bank slipped eight cents to 17.16 dollars.

Among blue chips, Singapore Telecommunications gained three cents to 3.90 dollars, Singapore Airlines rose two cents to 14.14 dollars and bourse operator Singapore Exchange finished 37 cents lower at 6.43 dollars. -- AFP