UPDATE 7: Emaar falls 7.1% to its lowest close since May 20, Saudi index rises.
Dubai's index closed lower and volumes slipped to a seven-week low, with Emaar Properties the biggest drag after announcing the closure of its Algerian office.
Emaar fell 7.1 percent to its lowest close since May 20. The developer cited a lack of progress in what was slated to be $20bn worth of projects for closing its Algeria office.
All other active stocks also declined, with Deyaar losing 5.1 percent and Union Properties sliding 5.3 percent. The index dropped 3.6 percent to 1,756 points.
"Dubai is the second most traded market in the region and has a broader spectrum of investors than of the others in the Gulf and so when it goes down, the decline tends to be more aggressive," said Chamel Sahmy, Beltone Financial regional senior sales trader.
Dubai's next support level was at 1,720 points, he added.
Saudi Arabia's index ended higher as petrochemical and telecoms stocks helped the benchmark rebound from Saturday's two-month closing low.
Saudi Basic Industries Corp (SABIC) climbed 1.3 percent and Rabigh Refining and Petrochemical Co rose 0.4 percent. The pair slipped to two-month lows the previous session after oil prices dropped below $66 a barrel on Friday. Saudi Telecom Co added 1 percent. [O/R]
"Saudi's index looked to stabilise after yesterday's fall, when it did a good job of pricing in weakness in oil prices and US stocks," said Ali Khan, managing director and head of brokerage at Arqaam Capital.
Banks struggle, with investors worried about potential exposures to the troubled Saad Group and Ahmad Hamad Algosaibi Group & Bros.
"People are lowering their expectations for banks' quarterly earnings, with rumours circulating that many other Saudi groups beside Saad and Algosaibi will default on debts," said Sunil Dhall, vice-president at Gulf Baader Capital Markets in Muscat.
Al-Rajhi Bank, Riyad Bank and Banque Saudi Fransi each fell by less than 1 percent.
The benchmark climbed 0.5 percent to 5,497 points. Volumes slumped to the lowest level since at least October 2008.
Abu Dhabi's benchmark ended lower for the second session in three, matching losses across the Gulf Arab region as falling oil prices and weak global markets soured sentiment.
The index dropped 1.3 percent to 2,637 points. Dana Gas and Abu Dhabi National Energy Co (Taqa) lost 6 and 3.3 percent respectively, while developers Sorouh Real Estate and Aldar Properties each dropped more than 5 percent.
Trading volumes slumped to a seven-week low.
Oman's index ended lower for the first time in four sessions as declining oil prices and sliding US stocks weighed on sentiment.
The benchmark dropped 0.3 percent to 5.677 points. Bank Muscat and Bank Dhofar fell 1.7 and 2.2 percent respectively as stocks across the Gulf Arab region tumbled following greater than expected US jobless numbers late last week.
In the absence of local catalysts, Gulf markets were tracking global stocks, analysts say.
"The US employment figures were shocking and it looks like the green shoots will turn into brown leaves," says Sunil Dhall, vice president of Gulf Baader Capital Markets in Muscat. "Oil is under pressure and it doesn't seem as though the situation in the West will improve anytime soon."
Oil fell to below $66 a barrel, dropping more than 10 percent from Tuesday's eight-month high.
Industries Qatar headed losers on Doha's index as stocks across the Gulf Arab region tumbled.
Industries Qatar fell 3.4 percent, while Masraf Al Rayan, which was again the most traded share, fell 2.4 percent.
All active stocks declined, dragging the index down 1.7 percent to 6,366 points.
National Bank of Kuwait (NBK) slid on the first day's trading since announcing it had renewed approval to buy up to 40 percent of Boubyan Bank.
NBK dropped 3 percent amid broad declines on the Kuwait index, with Boubyan sliding 3.5 percent.
Bank stocks are continuing to suffer as investors fretted over potential write downs from two troubled Saudi conglomerates.
Last week, the governor of the UAE central bank said all Gulf countries were exposed to Saad Group and Ahmad Hamad Algosaibi Group & Bros, which are restructuring billions of dollars of debts.
"Kuwait banks are rumoured to have exposure to the two groups and that has been a dampener on sentiment for some time now and will continue to be so until banks clarify their individual exposures," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.
None of Kuwait's 30 largest stocks advanced, with 19 declining and 11 unchanged.
Zain lost 3.2 percent, a day after Vivendi chief Jean-Bernard Levy declined to comment on media reports claiming his company was interested in buying Zain's African operations.
Kuwait's index dropped 1.1 percent to 8,022 points. All Gulf markets open for trading declined.