The region's largest bourses in Saudi Arabia and Dubai were unable to sustain gains from the previous session, with most major stocks coming under selling pressure.

"Usually, in the times close to the end of the quarter, investors sit back and wait for the results," said Hisham Tuffaha, head of investment research at Al-Bakheet Investment Research, about the Saudi market.

"So even any gains will not be sustainable (in this period). The results will be the driver in the market; even the downgrade of Greece was not a surprise. The drop today is because of gains on Monday, volatility will remain," he said.

The Tadawul All-Share Index (TASI) ended 0.3 percent lower at 6,323.95 as only four sectors closed the day with gains, which ranged from 0.13 percent in the Cement sector to a gain of 1.18 percent in the Hotel & Tourism sector. Negative sector movement on the other hand saw losses which ranged from 1.11 percent in the Transport sector, to a loss of 0.17 points in the Building & Construction sector. Overall market breadth was also negative, with 50 advancers and 75 decliners recording an AD ratio of 0.67, the Financial Transaction House (FTH) said in its daily market commentary.

Tuesday’s liquidity also saw a moderate increase, which came in at SR4.11 billion.

Dubai and Abu Dhabi both saw profit-taking after a bounce in the previous session. The Dubai index fell 1.3 percent to 1,503 points, while, the Abu Dhabi index slipped 0.7 percent to 2,511 points.

Real estate stocks came under considerable selling pressure in both Abu Dhabi and Dubai, while banking stocks fell after a Moody's report maintained a negative outlook on UAE banks.

Bellwether Emaar Properties declined 2.2 percent and Arabtec retreated 2.6 percent. Aldar Properties slipped 1.6 percent.

A report by Moody's on Tuesday said that asset quality among UAE banks will remain under pressure this year.

Emirates NBD, Dubai's largest bank by market value, fell 0.8 percent and Dubai Islamic Bank dropped 1.5 percent. First Gulf Bank retreated 1.7 percent.

A similar picture was observed across other regional bourses, but Oman's index was the only one to buck the trend and end higher, although traders pointed to news on Oman Cement lifting the market and not strong fundamentals.

Oman Cement raised its profit outlook on Tuesday after receiving $19 million in government compensation, sending its share price 7 percent higher.

The Kuwaiti index declined 0.4 percent to 6,529 points. The Qater index retreated 0.6 percent to 6,982 points.

The Omani measure edged 0.1 percent higher to 6,100 points.
 
 
— With input from agencies