The United Arab Emirates' earnings season is proving anticlimactic, with investors showing little reaction to results as they instead await a resolution to Dubai World's debt restructuring talks with banks.

The Dubai index dropped 0.9 percent to 1,724 points. The Abu Dhabi measure slipped 0.1 percent to 2,774 points.

Aldar dropped 3.6 percent to 3.86 dirhams, its lowest finish since March 8 after reporting a net loss of 314.2 million UAE dirhams ($85.57 million), missing forecasts.

"Aldar's results have been taken negatively, which has caused selling pressure on Abu Dhabi blue chips," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments. 

"Most of the selling in Aldar came before the earnings announcement, which shows a lot of investors expected bad numbers. We expect Aldar to find support around 3.70 dirhams and rebound from this level, with selling pressure coming in as it approaches 4 dirhams."

DFM dipped 2.3 percent after reporting an 8 percent decline in first-quarter profit.

"DFM quarterly results reaffirmed weak traded values on the exchange," Shuaa Capital wrote in a research note. "We remain of the view that DFM current valuations are overly stretched and reinforce our sell recommendation on the name." 

Emaar Properties fell 1.3 percent after it said it would not pay a dividend for 2009.

"There may be some disgruntled retail investors, but the statements from (Chairman Mohamed) Alabbar were upbeat and it will be Dubai World news which drives not only Emaar, but the rest of the UAE market," said Julian Bruce, EFG-Hermes director of institutional equity sales. 

Dubai World, which is in talks to restructure $26 billion in debt, is offering lenders an additional 1 percent in interest upon maturity of new debt, but the deal is unlikely to satisfy banks, analysts said on Thursday.

Kuwait Finance House (KFH) rose 3.9 percent despite reporting a 21 percent fall in first-quarter profit, rebounding after market talk the Islamic bank would make a loss weighed on the stock in recent trade. The Kuwaiti measure rose 0.1 percent to 7,310 points.

"There were rumors KFH would report a loss," said Naser Al-Nafisi, general manager for Al-Joman Center for Economic Consultancy in Kuwait. 

"Some expectations were for it to achieve an EPS (earnings per share) of 8 fils, but it is actually 12 fils, which has boosted the stock. "But if you annualize the Q1 figures, EPS for the full year will be 50 fils, which is not good, so we don't recommend buying the stock at current levels." 

Saudi Arabia's index slipped 0.14 percent, having been less than a point from a new 18-month intraday high to give up some of Saturday's oil-driven gains. Analysts said the uptrend remained intact. 

The Tadawul All-Share Index (TASI) closed at 6,907.34 points. The sector activity for the day remained widely negative with 13 out of 15 sectors closing with losses. The losing sectors ranged from Banks & Financial Services with 0.02 percent to Energy & Utilities sector with 0.83 percent of loss. On the other hand the two gaining sectors were namely Industrial Investment and Insurance with gains of 0.53 percent and 1.07 percent respectively. The overall market breadth for the day was also negative with losses of 58 advancers against 64 decliners giving it an AD ratio of 0.90, the Financial Transaction House (FTH) said in its daily market commentary. 

"Investors are coming back to the market and we can see that in the volume and turnover, which are at levels we haven't seen since 2009," said Hesham Abo-Jamee, Bakheet Investment Group head of asset management. "We're seeing a fall in real estate prices in Saudi Arabia and so real estate investors are increasingly moving back to the stock market."

The Qatari index fell 0.4 percent to 7,515 points. The Omani index rose 0.3 percent to 6,850 points.
 
- With input from agencies