UPDATE 6: Property-related stocks tumble, Saudi closes low as petrochem stocks fall.
Dubai's benchmark dropped to a six-week closing low as property-related stocks tumbled ahead of second-quarter results.Emaar Properties slid 4.6 percent, taking its losses to 23 percent since announcing plans to merge with three real estate units of Dubai Holding in late June. On Saturday, it closed its Algerian office after its projects stalled.
The index fell 2 percent to 1,721 points, its lowest finish since May 25. Deyaar dropped 5.4 percent and construction firm Arabtec lost 4.2 percent. The latter's second-quarter profit will fall 40 percent according to the average forecast in a Reuters poll.
"Second-quarter results have already been priced in and investors believe some have been over-priced and so are taking profits now," says Talal Al Loghani, vice president for Gulf equity markets at Kuwait Finance and Investment Co.
Abu Dhabi's index ended lower for a second day, slipping 0.4 percent to 2,625 points. Volumes slumped to a seven-week low.
Aabar Investments dropped 7.6 percent and Dana Gas lost 6.4 percent.
Saudi Arabia's index slipped to a 10-week closing low as petrochemicals stocks fell on declining oil prices.
Banks also retreated, with investors awaiting second-quarter results for an indication of potential write downs from the troubled Saad Group and Ahmad Hamad Algosaibi Group & Bros, which are restructuring billions of dollars of debts.
Saudi Basic Industries Corp (SABIC) fell 3.4 percent and Rabigh Refining and Petrochemical Co lost 2.2 percent.
The index fell 1.6 percent to 5,407 percent, its lowest close since April 25.
Al-Rajhi Bank and Riyad Bank each slid 1.2 percent. Qatar's benchmark slipped to a two-month closing low as sliding oil prices and losses on regional and global markets dampened sentiment.
The index fell 1.4 percent to 6,281 points, its third decline in four sessions and lowest finish since May 6.
Industries Qatar dropped 1.8 percent and Qatar Gas Transport Co lost 2.5 percent.
"There are still jitters and volatility in the market," said Arabi. "But volumes are low and not many people are interested in selling at current levels."
Bahrain's index declined for a second day, falling 1.1 percent to 1,572 points in its largest loss this month.
Kuwait's index made its largest one-day decline for more than nine months as investors sold on falling oil prices and worries that second-quarter results may disappoint.
The benchmark ended 3.6 percent lower at 7,664 points, its biggest one-day loss since September 15 and second straight reverse.
Zain plunged 8.3 percent after France Telecom said it was not currently considering bidding for Zain's assets.
National Bank of Kuwait and Kuwait Finance House lost 4.8 and 6.8 percent respectively.
"As usual, there's a lot of talk in the Kuwait market about banks' earnings and the rumours are saying these could be disappointing," says Talal Al Loghani, vice president for Gulf equity markets at Kuwait Finance and Investment Co.
"Banks have to send their results to the central bank for approval and it seems some have been revised three or four times. This is what happened in the first quarter as well and is triggering negative sentiment."
Oil prices fell towards $64 a barrel on Monday as worries over the global economy grew.
Oman's index ended slightly lower, with volumes falling to a 16-week low.
The benchmark slipped 0.05 percent to 5,674 points.
Bank Dhofar dropped 1 percent and Galfar Engineering gave up early gains to fall 2.8 percent as losers outnumber gainers 22 to two.