At 0500 GMT, the Straits Times Index (STI) was down 2.6 percent, or 75.14 points, at 2,767.95. Some 738 million shares worth about S$570 million were traded by that time, compared with around 634 million shares worth about S$639 million that changed hands by the same time on Friday.
"There have been a couple of big changes to macro perceptions over the past month -- the worsening outlook for the US and European economies, as well as for global trade," said Derek Ovington, an analyst at CLSA Asia Pacific Markets.
US jobs data on Friday showed employment growth stalled last month, while Europe faces a string of political and legal tests this week that could hurt efforts to resolve its sovereign debt crisis and increase pressure on governments to try more radical solutions. .
Singapore counters that were largely exposed to the global economy and trade flows were some of the hardest-hit.
Shares of container shipping firm Neptune Orient Lines (NOL) sunk as much as 5.7 percent. Around 0500 GMT, the stock was down 4.8 percent at S$1.085 with more than 4.7 million shares changing hands.
Deutsche said it expects the Asian container shipping sector to dip into the red in 2011. But with rates likely to fall in the next one to two quarters, carriers will be forced to be disciplined as their cash flows turn negative and this will in turn help lift rates, Deutsche noted.
Around 0500 GMT, commodity firms Noble Group and Olam International dipped more than 3 percent each. Oil rig builders Keppel Corp and Sembcorp Marine retreated 4 percent and 3.8 percent, respectively.
Shares of Singapore banks were also hit on concerns about slower loan growth and increased margin pressure amid the weak general sentiment in the market.
Around 0500 GMT, shares of DBS dipped 3 percent, Overseas-Chinese Banking Corp fell 2.6 percent and United Overseas Bank was 2.2 percent lower.
"Singapore banks are beset on multiple sides by potential downside risks," CLSA's Ovington said.
"It's clear from money market response that there has been a flow of funds into Singapore, and that's pushed down the inter-bank rate and put further pressure on net interest margins."
Copyright Reuters, 2010