Oman's shares ends lower for second-day, hampered by negative sentiment over US downgrade
Saudi Arabian shares were flat, giving up modest early gains but extending their recovery from Saturday's fall as investors rethink the affects of a US credit rating cut.
The benchmark eased 0.06 percent to 6,074 points, clawing back more ground after dropping 5.5 percent on Saturday. It ended higher on Sunday.
"Right now investors are acting on optimism that the downgrade [reaction] was overdone. It's not going to be that significant and no one is going to be dumping US treasuries," says Asim Bukhtiar, head of research at Riyadh Capital.
"I do expect volatility going forward but the key market to watch would be the US and how investors absorb the news there."
Most petrochemical stocks were up. Bellwether Saudi Basic Industries Corp (SABIC) climbed 0.5 percent, Saudi Kayan Petrochemicals gained 0.6 percent and Yanbu National Petrochemical Co (Yansab) rose 0.22 percent.
Among banks, Samba Financial Group advanced 0.2 percent.
Elsewhere, Kuwait's index rose 0.1 percent to 5,974 percent.
Petrochemicals and metals firm Industries Qatar led declines in Doha as the index slipped for a second day, with jittery investors reducing positions on global growth worries.
Industries Qatar fell 1.2 percent. The benchmark fell 0.4 percent to 8,243 points, extending decline from Sunday's six-week low.
"Saudi Arabia and Qatar's markets are more exposed to demand shocks in Asia," said Akram Annous, MENA strategist at Al Mal Capital. "My medium term outlook is that you'll see disappointment coming out of Asia on growth. That will impact the earnings picture in petrochems."
Losers outnumbered gainers 15 to two. Islamic bank Masraf Al Rayan slipped 0.2 percent and Barwa Real Estate shed 0.8 percent.
UAE markets were mixed and Oman's bourse recovered losses in muted trading as investors fretted about the global growth outlook and Europe's debt woes.
Dubai's index fell 1 percent to 1,480 points, extending losses from Sunday's 20-week closing low.
Bellwether Emaar Properties slipped 0.7 percent, and logistics operator Aramex dropped 2.2 percent.
"The reality is that the EU situation will be with us for a good while, not just a quarter or two - it's a structural change that will take many years to work through," said Ibrahim Masood, senior investment officer at Mashreq bank.
"We should expect a fair bit of [market] volatility," he adds.
Abu Dhabi's benchmark recovered losses seen at the open, and climbs 0.09 percent to 2,606 point.
Energy firm Taqa jumped 5 percent, ahead of its second-quarter earnings results later this week.
Two analysts polled by Reuters expect the firm to post a net profit of AED204m and AED294m.
Elsewhere, Oman's index climbed 0.4 percent to 5,671 points. Oman Telecommunications Co rose 2.7 percent.