Qatar's index ended lower for a fourth session in five as fading World Cup euphoria pushed the market to consolidate.
Commercial Bank of Qatar and Qatar Electricity and Water each fell 1 percent, while Qatar National Bank dropped 0.8 percent.
The index dipped 0.1 percent to 8,655 points, trimming its gains since Qatar was chosen to host the 2022 soccer event to 6.5 percent. It is up 24.5 percent in 2010.
"The Qatar market is consolidating, which is good because it has done wonderfully well over the past few months," said Shakeel Sarwar, Sico investment bank head of asset management.
"I don't expect a spectacular year end rally on regional markets, but as we enter the New Year and Q4 results start to come out, there will be stock and sector specific moves," he added.
Kuwait's bluechips were flat for a second day on slim volumes, indicating institutions are largely absent, spurring retail traders to target small cap names.
Nine of the 10 largest stocks end unchanged. Ahli United Bank was the exception, rising 1.4 percent.
"The bluechips are correlated to whatever happens with Zain and it's a complicated issue," said Essa al Hassawi, assistant manager at Zumorroda Investment Co in Kuwait.
Kharafi linked stocks rebounded following recent declines, with National Industries Group adding 2.9 percent and Kuwait Food Co climbing 1.3 percent.
Kharafi is a major shareholder in Zain and is leading a consortium selling a 46 percent stake in the telecoms operator to Abu Dhabi's Etisalat. The deal deadline is Jan 15, but some analysts expect this to be extended.
After market hours, a Kuwait court dismissed a case filed by Zain shareholder Al Fawares Holding to stop due diligence in the stake sale.
Oman's Renaissance Services extended gains following its purchase of a UAE company, helping Oman's index hit a 32-week closing high.
Renaissance climbed 2 percent to its highest finish since Sept 23. 2008. On Monday, it said it had bought Abu Dhabi based Al Wasita Emirates for Services and Catering in an AED56m ($15.25m) deal to expand its contract services operations in the UAE.
Most bluechips slid. Bank Muscat fell 0.4 percent and telecoms operator Nawras dropped 1 percent.
"Most of the brokers are pushing traders to close positions before the year-end, but there was good buying from asset managers and foreign institutions," said Adel Nasr, United Securities brokerage manager.
"The main buying was in Bank Sohar, Bank Muscat and Nawras, even though some of these stocks fell, and that is a very positive signal for the start of next year.Other Gulf markets are similar and I don't think we'll see any surge until 2011," Nasr added.
Bank Sohar rose 0.5 percent.
The index climbed 0.1 percent to 6,719 points, its highest finish since May 12.
Dubai's Drake & Scull rose after winning an AED340m ($92.57m) contract for the Abu Dhabi Presidential Palace.
Drake climbed 1.2 percent. Builder Arabtec rose 0.5 percent and Emaar Properties added 1.2 percent.
Dubai's index rose 0.5 percent to 1,634 points, rebounding slightly from Tuesday's 15-week low.
"The lack of buying interest requires that traders remain on the sidelines despite the possibility of a bounce," Shuaa Capital wrote in a research note.
Abu Dhabi's index slipped 0.1 percent to 2,696 points.
Saudi Electricity Co hit a two-month high after the utility said it may involve private firms in building more power plants.
Saudi Electricity rose 1.43 percent, hitting its highest level since Oct 25.
Banks fell, with Banque Saudi Fransi losing 2.2 percent and Samba Financial Group dropped 0.4 percent.
The bank index is up 5 percent this year, underperforming the petrochemicals sector, which has gained 21 percent over the same period, as lacklustre loan growth and continued provisions ate into lenders' profits. Together, these two sectors account for about two thirds of bourse market capitalisation.
"2011 will be the year of banks - many investors will be paying particular attention to banks' full-year figures because these are outside audited and so there is more trust in these numbers," said Youssef Kassantini, a Saudi based financial analyst.
"In 2009 and 2010, banks were too busy building up provisions to more than 100 percent of the value of their toxic assets, but provisions should fall next year, freeing up money to increase lending, especially to the private sector," he added.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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