It brought to 13 the number of companies fined for violating disclosure regulations since May 16.

Al-Baha Investment and Development Co. was fined SR100,000 for disclosing acquisition plans to the Capital Market Authority after they were leaked to a website, the CMA said.

Methanol Chemicals Co. (Chemanol) was also fined SR100,000 and Saudi International Petrochemical Co. was fined SR50,000 for other disclosure violations.

Meanwhile, petrochemical shares were the main losers on Saudi Arabia's index which fell 1.4 percent to 6,364 points.

Only two sectors managed to close the day with gains, which were the Energy & Utilities sector and the Media & Publishing sector, which saw gains of 1.68 percent and 0.71 percent respectively. Sector losses ranged from 0.13 percent in the Transport sector to a loss of 2.53 percent in the Petrochemical Industries sector. Overall market breadth was negative, with 14 advancers and 114 decliners recording an AD ratio of 0.12, the Financial Transaction House (FTH) said in its daily market commentary.

Saudi Basic Industries Corp. (SABIC) was the top loser among blue chips, closing down 3.4 percent. Saudi Kayan Petrochemical Company fell 2.9 percent and Yansab an affiliate of SABIC, dropped 2.8 percent.

Dubai's benchmark declined for the first session in four, led by heavyweight Emaar Properties which fell 3 percent. Investment bank Shuaa Capital fell 6.5 percent.

Telecoms operator du was the only stock that ended in positive territory after raising $272 million in a rights issue. The stock rose 0.9 percent.

Dubai's benchmark dropped 1.4 percent to 1,542 points.

Investor sentiment was also hurt by an announcement from index provider MSCI, maintaining United Arab Emirates and Qatar stock markets as frontier markets in its 2010 annual market classification review.

"There was speculation that UAE and Qatar would be included in the MSCI index but that isn't happening and that's slightly negative," said Shahid Hameed, head of asset management at Global Investment House.

In Abu Dhabi, investment firm Aabar was the most volatile stock, falling more than 5 percent earlier in the day and closing up 2.4 percent after a late rally.

On Monday, the company said it would meet on June 24 to discuss a date for an extraordinary general meeting to consider delisting from the bourse.

"The news was very unclear and confusing for retail investors who did not seem to have a definite direction to trade the stock," said Samer Al-Jaouni, general manager for Middle East Financial Brokerage Co.

Qatar's benchmark fell 0.5 percent, while Kuwait's index bucked the trend and rose 0.4 percent.

Egypt's main index dropped the most in nearly a month on Tuesday, led by developer Talaat Moustafa, while most Middle East markets fell as investors booked profits after a two-day rally. The index fell 2.9 percent to 6,355 points.
 
— With input from agencies