UPDATE 6: Shares climb 2.1% to help lift Dubai index 0.3% while Abu Dhabi declines.
Arabtec led Dubai gainers after the builder won new contracts, helping the index ease away from Sunday's 14-month low. Arabtec climbed 2.1 percent, rebounding from the previous day's 2010 low. The firm won three contracts in Abu Dhabi worth $203 million combined.
Emaar Properties gained 1.3 percent and Air Arabia added 1.2 percent.
"There is no interest from European investors in our market," said Vyas Jayabhanu, head of investments, Al Dhafra Financial Broker.
"Most foreign activity has been limited to individuals - foreign funds and investment houses are absent because they're worried about the situation in Europe and have no cash spare for the UAE - they would rather target other emerging markets."
The index climbed 0.3 percent to 1,518 points, but remains the worst performing Middle East benchmark this year, losing more than 14 percent. Abu Dhabi is the second-worst, dipping about 6.5 percent.
"Dubai could fall below 1,400 points - at this level, local investment houses would probably step in to support that market," said Jayabhanu, adding the index could reach this milestone by mid-July, if not sooner.
Abu Dhabi ended lower for an 11th session in 12, dipping 0.3 percent to 2,531 points.
Waha Capital dropped 3.5 percent.
Retail selling condemned Kuwait's index to a second straight decline as volumes slumped to a 16-month low, with little local news to attract investors.
National Bank of Kuwait fell 1.7 percent and Kuwait Finance House ended 1 percent lower, having hit a four-month intraday low.
"The story is that there's no story," said a Kuwait trader who spoke on the condition of anonymity. "One of my clients has more money in his account than what the market has traded today."
The index fell 0.7 percent to 6,665 points as trading volumes slump to their lowest level since January 21, 2009.
The trader said tougher new rules introduced earlier this year after Kuwait's parliament approved the creation of a bourse regulator are deterring investors, while a lack of local catalysts and Zain's ongoing suspension are other reasons behind the low volumes.
"There are no sparks in the markets, so it's just some retail investors selling today," the trader added.
Market heavyweight Zain will remain halted until it completes all the preparations for closing a deal to sell African assets, a newspaper reported on Monday.
Qatar's index fell 0.2 percent to 6,762 points, giving up initial gains as Qatar Telecom dropped 1.1 percent.
Saudi Basic Industries Corp (SABIC) surged as bargain hunters bought the stock following recent falls, helping Saudi Arabia's index end higher for a first day in three.
SABIC climbed 4.6 percent to 85.75 riyals, but is down 19.7 percent since May 4's 19-month high as it tracks tumbling oil prices.
"SABIC has suffered a huge drop and was heavily affected by the declines in petrochemical and oil prices," said Youssef Kassantini, an independent financial analyst.
"Although petrochemical prices are under pressure, the market has over-corrected and SABIC is trying to get back to a fair price. Any time SABIC heads towards 80 riyals bargain hunters step in."
Crude is down 0.2 percent at $71.39 per barrel, paring losses after hitting an intraday low of $69.51.
The Saudi index climbed 1.1 percent to 5,988 points.
Samba Financial Group climbed 5.3 percent on slim volumes and Yanbu National Petrochemical Co's (Yansab), a SABIC affiliate, gained 1.7 percent.
Oman's benchmark dipped to a fresh 2010 low as declining world markets and uncertainty over the impact of last week's cyclone spook investors.
National Bank of Oman fell 3 percent, while Ahli Bank and Oman United Insurance each dropped 4.7 percent.
"In sync with Asian markets and oil price movement, the Oman market has pulled back on light volume," Osama Ibrahim Al-Qinna, head of Head of Brokerage Division at Oman Arab Bank.
Oil is down 1.6 percent at 0801 GMT, while the Japanese Nikkei ended 3.8 percent lower and the London FTSE is down 1.5 percent.
Cyclone Phet killed 16 people in Oman on Friday and wounded dozens more.
"Due to government and local body's pre-emptive measures against the cyclone, there was no material impact on business environment. But still investors are waiting for more clarification from companies, which is keeping them away from the market."
The index fell 1.2 percent to 6,064 points, hitting its lowest level since December 13. (Reuters)