"It's the end of the quarter, so investors are closing positions and most Gulf markets are down," said Adel Nasr from United Securities. "I believe the market will rebound tomorrow (Thursday)."

The Tadawul All-Share Index (TASI) slipped 0.2 percent to 6,801.01, retreating for a third session in four as a fall in bank profits and a fifth straight monthly decline in money supply growth weighed on sentiment. The sector activity was balanced between the gaining and losing sectors. The gaining sectors ranged from 0.04 percent by the Petrochemical Industries sector to 1.35 percent by the Insurance sector. The losing sectors ranged from 0.11 percent by the Media and Publishing sector to 1.10 percent by the Cement sector.  The overall market breadth remained negative with 41 advancers and 66 decliners recording an AD ratio of 0.62, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

SABB dropped 1 percent, Arab National Bank lost 1.5 percent and Al-Rajhi Bank dipped 0.6 percent.

"Saudi equities ticked down today (Wednesday) on profit-booking after the market scaled recent high levels," said Mohammed Ishaq Ali, a fund manager at Al-Rajhi Capital. 

"The slowdown of money supply growth and fall in banking sector profit also reflected on market sentiments."

Heavyweight Saudi Basic Industries Corp. < (SABIC) rallied late to end flat at a 17-month closing high. It is up 20.6 percent year-to-date, bolstered by rising oil prices.

Egypt's main index fell 0.2 percent to 6,806 points as investors switched to cash ahead of a four-day Easter weekend.

"It's too much of a risk to stay four days and not be able to take action if any news happens," said Mohamed Helmy of HC Brokerage. "So more investors would prefer to stay in cash."

Previous holidays have coincided with the collapse of Lehman Brothers and the start of Dubai World's debt worries.

Orascom Construction Industries dropped 0.2 percent after saying it will buy the fertilizer and melamine units of Dutch chemicals group DSM.

"It's not clear how much the new acquisition will add to the company," Helmy said. "Basically, it's neutral." 

Zain fell 2.9 percent, its biggest drop for two weeks, after the telecoms operator said it would make a net profit of about $3.3 billion from its African asset sale. In February, Zain said it would net up to $5 billion from the deal with Bharti Airtel.

Global Investment House dropped 1.9 percent after the Kuwait bourse suspended it from Thursday pending arbitration with two companies over about $50.2 million.

Air Arabia fell 9.3 percent after going ex-dividend and most other Dubai stocks struggled to advance as investors booked profits from a March index surge, gaining 15.7 percent for the month. 

"The market needs to take a breather to build stronger supports and give investors confidence that it can hold around these levels," said Ayman El-Saheb, Darahem Financial director of operations. "The longer it takes for the market to consolidate the more skeptical investors will become."

Industries Qatar hit a 15-week intraday high, ending 1.6 percent higher, but Doha's index edged lower.

"Market volumes are still low," said Hesham Kalla, investment manager at Doha Bank. "Seasonally, we see this occurrence as the market ramps up prior to dividend season in anticipation of generous payouts by the local companies."

The Dubai index dropped 0.4 percent to 1,843 points. The Abu Dhabi index fell 0.6 percent to 2,908 points.

The Kuwaiti measure dropped 0.1 percent to 7,534 points, while Qatar's index slipped 0.04 percent to 7,462 points.
 
- With input from agencies