UPDATE 5: Dubai down to 14-month closing low on worries over Dubai Holding debt.
Dubai's index slumped to a 14-month closing low as worries over the financial health of Dubai Holding and Friday's global equity sell-off pushes investors to the exit.
"There are jitters about Dubai Holding rolling over some of its debt and although officials say it won't need to restructure debts there have been various articles saying this could still happen," said Zahed Chowdhury of Al Mal Capital. "This is causing uncertainty."
On Tuesday, Dubai Holding's main unit said it may resort to asset sales to deal with its debt after posting a $6.2 billion loss for 2009.
In late May, Dubai Holding unit Dubai International Capital asked for a three-month delay on debt repayment.
Emaar Properties and Deyaar dropped 3.1 and 1.5 percent respectively.
On Thursday, Credit Suisse issued a report saying Dubai residential property prices could fall another 15 percent to 20 percent as oversupply peaks in 2011.
The index fell 1.8 percent to 1,513 points, its lowest close since March 18, 2009.
Abu Dhabi's benchmark also declined, slipping 1.3 percent to 2,538 points.
Oman insurance stocks fall after a cyclone hit the country, killing 16 people, while other shares also dipped, tracking losses on global markets as Muscat's index slumped to a 2010 low.
Oman United Insurance fell 8.1 percent and Dhofar Insurance dropped 1.2 percent.
Bank Muscat fell 1.7 percent and Renaissance Services dropped 2.9 percent.
The index fell 0.9 percent to 6,140 points, its lowest finish since December 13.
Saudi Basic Industries Corp (SABIC) ended lower for a fourth day on fears an ongoing debt crisis in the euro zone will harm a global economic recovery and, with it, demand for petrochemical products.
SABIC fell 1.5 percent and rival Rabigh Refining and Petrochemical Co lost 0.6 percent.
"We're looking at US and European markets for direction and the euro zone crisis is about countries not companies - investors worldwide are uncertain whether some European countries will be able to pay back their debts," said Hesham Tuffaha, Bakheet Investment Group head of research.
"Markets are in the same trend, but the percentage moves vary. We can't say the euro crisis won't affect the Saudi market - it will be felt through the petrochemicals sector."
Oil fell more than 4 percent on Friday and the Dow Jones industrial average lost 3.2 percent on fears Hungary could become the next casualty in an escalating European debt crisis.
Comments from Hungary's incoming government are now perceived as being politically motivated to embarrass the previous administration and analysts say world markets could recover if the original Hungarian comments are seen as exaggerated.
Saudi Arabia's index slipped 0.05 percent to 5,925 points, taking its losses to 14.5 percent since April 26.
Qatar's index fell for a second day in three, tracking losses on other regional markets.
Losers outnumbered gainers 16 to one, with Masraf Al Rayan the main drag, dipping 1.5 percent. It was also the most active stock, accounting for more than a quarter of all shares traded.
"Global markets are not particularly strong for various reasons such as sovereign debt problems in Europe and weaker-than-expected employment figures from the US," said Zahed Chowdhury of Al Mal Capital.
"We're seeing a ripple effect from that today. The de-risking on global and emerging markets in May is continuing this month, but at a slower pace."
The Qatar index fell 1.1 percent to 6,729 points.
Kuwait's index ended lower for a first session in four as investors cashed in gains in National Bank of Kuwait, while other stocks also dipped as negative global sentiment weighed.
NBK fell 1.7 percent, but is up 15.9 percent year-to-date, outperforming the bank index, which has gained 8.2 percent over the same period.
Trading remained subdued, with market heavyweight Zain suspended for a sixth trading day pending the payment of its 2009 dividend, with this expected to be completed by Thursday, a Kuwait trader said, speaking on condition of anonymity.
Kuwait Finance House ended flat to be just above Wednesday's four-month low.
Bahrain's measure bucked the regional trend and rose 0.1 percent to 1,418 points. (Reuters)