"There are no real drivers in the market - the majority of institutions are sitting on their hands and seeing how global markets play out," said Julian Bruce, EFG-Hermes director of institutional equity sales. "There are no domestic catalysts and volumes are very low." 

European shares climbed close to 1 percent and the euro strengthened on Wednesday on evidence of continued German growth and Spain's plans to cut its deficit.

Kuwait was the biggest regional gainer, rising 0.7 percent to 7,135 points. Bellwether lender National Bank of Kuwait climbed 1.7 percent after it refuted talk that group Chief Executive Ibrahim Dabdoub had resigned.

Dubai climbed 0.5 percent to 1,715 points, with contractor Drake & Scull gaining 1.4 percent as its order backlog rose to 4 billion UAE dirhams ($1.09 billion), outweighing disappointment over a fall in first-quarter profit. 

"We are keeping our buy recommendation - based on the high year-to-date backlog awards, medium-term earnings sustainability, resilient gross profit margin and upside from forthcoming Saudi Arabian acquisitions," Shuaa Capital wrote in a research note. 

Drake's quarterly profit fell 39 percent.

"Drake's results were a little disappointing, but there's very little reaction to company-specific news at the moment," said Bruce.

Saudi Basic Industries Corp. (SABIC) rose 1.5 percent, clawing back some of Tuesday's losses, as Saudi Arabia's index ended slightly higher despite volumes slumping to a five-week low. 

"There are few local catalysts and what ones there are, people are ignoring," said a Riyadh-based trader at an international bank who asked not to be identified.

He cited Tuesday's announcement from SABIC that its joint venture with China's Sinopec has begun operations as evidence of this.

"The deal with Sinopec will give SABIC more capacity, with lower costs because it won't have to export their products and politically it's a good deal because SABIC won't be accused of dumping in the Chinese market," the trader said. "It is big news for SABIC and I don't think it has been priced in yet."

Investors appear to be switching to defensive names on the bourse, losing interest in petrochemicals and banks to put their money in retail, telecoms, food and agricultural stocks.

"People are getting out of cyclical names, while insurance stocks have been rallying hard," the trader added. 

"Whenever the market is moving down, speculators target insurance stocks, which are small-caps and so the big traders can move them either way and try to make a quick buck."

The Tadawul All-Share index (TASI) edged up 0.03 percent to 6,692 points. The sector activity was mostly negative for the day. The gaining sectors for the day ranged from 0.09 percent by the Insurance sector to 0.77 percent by the Telecommunication & Information Technology sector. The losing sectors on the other hand ranged from 0.05 percent by the Banks & Financial Services sector to 1.48 percent by Agriculture & Food Industries sector. Overall market breadth was negative with 52 advancers and 62 decliners, recording an AD ratio of 0.83, the Financial Transaction House (FTH) said in its daily market report.

In Egypt, Orascom Telecom (OT) fell 0.3 percent ahead of the publication of its quarterly earnings on Thursday.

The Egypt index rose 0.2 percent to 6,836 points. The Qatari index fell 0.4 percent to 7,321 points.
   
 - With input from agencies