"There is not much of a promise coming from Asia, Europe and the US Investors should be watching more signs of solid and stable recovery in the global markets," said Saleh al-Onazi, vice president of principal investment at Swicorp in Riyadh.

Abu Dhabi's measure > touched a one-week low, falling 1.1 percent to 2,719 points while Dubai fell 1 percent to 1,569 points, its fifth consecutive drop as banking and real estate stocks continued to be sold off in both the indices.

"The sentiment is negative and banks and real estate stocks, which have the largest exposure to Dubai's debt are getting hit," said Mohammed Yasin, chief executive of Shuaa Securities.

Abu Dhabi Commercial Bank plunged 5.6 percent to a three-week low while in Dubai, Shuaa Capital, the United Arab Emirates' biggest investment bank, was the top-loser falling 5.1 percent.

The Tadawul All-Share Index (TASI) closed down 0.1 percent to 6,466 points as SABB Bank, HSBC's Saudi affiliate, fell 4.8 percent after saying non-performing loans soared 16 times to $940.3 million in 2009.

The sector activity remained negative with losses seen in 10 sectors ranging from 0.05 percent by the Energy and Utilities sector to 0.68 percent by the Multi-Investment sector. However the gains for the day ranged from 0.13  by the Telecommunication & Information Technology sector to 0.69 percent by the Cement sector. The market breadth for the day was negative with 41 advancers against 73 decliners giving an AD ratio of 0.56, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

"There are a lack of catalysts in the markets now and internationally signals are pretty mixed," said one analyst who did not want to be identified.

Qatar's index  fell 1.2 percent as investors booked profits in banking stocks post their dividend payouts. Qatar Islamic Bank was the top-loser in the index, falling 8 percent after declaring a 60 percent cash dividend.

In Kuwait, index heavyweight Zain fell 3 percent, pushing the broader index down 0.3 percent to 7,379 points.

Egypt's index saw some late session buying in bluechips Orascom Telecom and Commercial International Bank (CIB). The index rose 0.5 percent to 6,608 points.

- With input from agencies