JEDDAH/DUBAI: Agility surged to a two-month high on Tuesday after the US government said it was near to a deal with the Kuwait firm, which stands accused of defrauding the US military on multibillion-dollar supply contracts.

This helped Kuwait's index rise 0.8 percent in its biggest gain since Feb. 16, easing away from Monday's 10-week low. But other Middle East markets fell as a pullback in oil prices and world equities spurred regional investors to lock in gains.

Agility climbs 8.2 percent to its highest finish since Feb. 22. It is down 39 percent since fraud charges were brought in November.

"In Kuwait, worries remain over banks' NPLs (nonperforming loans) from their exposure to financial services companies," said Zahed Chowdhury of Al-Mal Capital. "Whatever performance we've seen in Kuwait is beginning to fade away."

The index is down 4 percent since hitting a five-month high on April 7.

Saudi Arabia's Tadawul All-Share Index (TASI) fell 0.3 percent, easing from Monday's 19-month high as financial stocks in the world's top oil exporter declined.

"The global backdrop and commodity prices are weaker today, so we should expect some profit-taking in Saudi Arabia," said Arqaam's Khan. "Saudi Arabia's bullish medium- to long-term macro picture remains intact, together with strong oil, but nothing moves in a straight line, so it's normal to see some gains given back."

Kingdom Holding dropped 2.1 percent, Al-Rajhi Bank lost 0.9 percent and SABB dipped 1 percent.

The market closed with losses across almost all sectors on Tuesday The only sector that saw some gains was the cement sector, which was up 0.17 percent. Losses ranged from 0.07 percent in the transport sector to 0.55 percent in the multi-Investment sector. Overall market breadth was negative today, with 36 advancers losing out to 81 decliners, recording an AD ratio of 0.44, the Financial Transaction House (FTH) said in its daily market commentary.

In Dubai, Emaar Properties gave up initial gains to end 2 percent lower after Moody's gave the developer a negative outlook, citing risks related to the sale of unsold properties in local and international markets.

The ratings agency also highlighted risks relating to cash collection of presold property by the builder of the world's tallest tower.

"Emaar's Q1 numbers were good, but the price reaction has been poor as the market continues to focus on Dubai World's restructuring, particularly the progress with banks, which remains unclear," said Ali Khan, managing director and head of brokerage at Arqaam Capital, speaking before the Moody's statement.

"There's been more progress with trade creditors, but investors are looking for clarity from banks and until we understand the impact on banks' balance sheets, their ability to lend and the knock-on effects for the real estate sector, it will be hard to attract liquidity in any meaningful way."

Government conglomerate Dubai World is in talks with domestic and international banks to restructure multibillion-dollar debts. On Monday, property unit Nakheel said its trade creditors had begun signing settlement agreements.

Oil slipped below $84 on Tuesday, pulled lower by expectations of a rise in US stockpiles and nagging concerns Greece's economic trauma could have knock-on effects on the wider economy and demand for fuel.

-- With input from agencies