Equity investors dumped Saudi Arabian stocks on Sunday, deterred by a recent downturn in global equity and oil markets while Qatar's index held on to small gains as traders bought shares on price dips.
Riyadh's index pulled back 1.9 percent on the first day back following a 10-day Eidul-Azha break. But trading volume was the lowest since last September.
Oil-related companies were hit with Saudi Kayan Petrochemical declining 2.3 percent in heavy trade, after Brent futures fell by around 5 percent during the 10 days the Riyadh bourse was closed.
Banking shares were also weak with heavyweight National Commercial Bank dropping 4.2 percent.
Key interest rates in Saudi Arabia are linked to US interest rates, given the currency's peg to the dollar, and the uncertainty over Wednesday's US Federal Reserve meeting following a week of mixed US economic data weighed on sentiment. However, the market viewed the likelihood of a US rate rise as low.
Qatar's share index climbed 0.4 percent in active trade, with volume the highest in a month as investors bought back some shares which were hit by profit taking before the holiday.
Islamic lender Masraf Al Rayan was the most traded share and added 0.7 percent while telecommunication operator Ooredoo jumped 3.9 percent.
Shares in companies set to be included in index compiler FTSE's secondary emerging market index on September 20 outperformed last month.
Dubai's index steadied and added 0.03 percent after it fell 1.1 percent on Thursday, when it reopened after a week-long holiday.
Shuaa Capital surged 9.3 percent. Shares in the investment firm have surged 36.5 percent over the past three weeks since the firm started to offer liquidity services for Nasdaq Dubai's single stock futures trades. Shuaa is the only firm offering market-making facilities to brokers.
GFH Financial Group added 2 percent, extending its 1 percent gain from Thursday after the company said its Dubai-based subsidiary GFH Capital sold its remaining 18 percent stake in English football club Leeds United.
In neighbouring Abu Dhabi, blue chips dragged the index 0.3 percent lower. First Gulf Bank lost 0.8 percent and telecommunication giant Etisalat edged down 0.3 percent.
Egypt's index of the 30 most valuable stocks fell 0.8 percent in thin trade as roughly two-thirds of the shares declined.
Real-estate developers were some of the top losers with Talaat Mostafa Group shedding 4.4 percent and Porto Group declining 3.7 percent.
Over the next three-to-six months Credit Suisse expects a better performance from Gulf equities, supported by a more positive outlook on oil prices and stabilising earnings forecasts.
"Valuations are reasonably attractive, being in line with the long-term average... Technicals suggest the worst is behind us, though we believe it is too early to turn outright bullish."
Analysts see further downside risks to Saudi Arabia, Qatar and Bahrain and they favour shares in the UAE, especially companies in Dubai.
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