STC dropped 8.3 percent to its lowest finish since April 5, 2009, a day after reporting a 29 percent drop in quarterly profit.  Zain Saudi Arabia also fell 3.7 percent after posting a first-quarter loss.

The Tadawul All-Share Index (TASI) dropped 2 percent to close 6714.59 points, taking its losses to 2.6 percent since posting an 18-month high on April 11.

Losses were seen across the board with only two sectors making gains. Transport and multiinvestment sectors made gains of 0.49 percent and 0.54 perent respectively. The losses ranged from 0.71 percent in the real estate development sector to 4.59 percent in the insurance sector.

The overall market breadth remained negatively biased with only 10 advancers against 125 decliners giving it an AD ratio of 0.08, the Financial Transaction House (FTH) said in its daily market commentary.

In Dubai, Du dropped 4.8 percent to a nine-month closing low, falling for a second day since unveiling plans for a 1 billion dirhams rights issue.

“Many investors are reluctant to put money into the rights issue - they would rather sell now and then buy back once the issue is completed,” said Marwan Shurrab, vice president and chief trader at Gulfmena Alternative Investments.

“These investors do not have the liquidity to buy into the rights issue — liquidity is an issue for individual investors and companies.”

The index slipped 0.1 percent to a month-low in its fourth straight loss.

“Nothing has changed in terms of attracting new buyers at current levels, so people are doing some profit-taking on a daily basis,” added Shurrab.

Doha Bank and Commercial Bank of Qatar rose 1.8 and 1.1 percent respectively, as both lenders reported a drop in first-quarter profit, but beat estimates.

Qatar will reshuffle its leading stocks index DSM 20 to boost liquidity and transparency, adding heavyweight stocks, including Qatar Telecom to the benchmark, Qatar Exchange said.

— With input from agencies