SABIC shares fell 3.42 percent to SR84.75 - its lowest finish since July 7. Late on Sunday, the firm reported a quarterly profit below estimates.

"Investors gave a delayed reaction to SABIC's results," said a Riyadh-based analyst who asked not be identified. "SABIC's numbers weren't a disaster, but it's all about what to expect in the third and fourth quarters and I think with European markets falling today, people woke up to that."

The Tadawul All-Share Index (TASI) dropped 1.02 percent to 6,068.65 points. The sector activity for negatively biased with 13 out 15 sectors closing with losses ranging from 0.23 percent by the Retail sector to 2.40 percent by the Petrochemical Industries sector. On the other hand, gains were seen only in 2 sectors namely Telecommunication & Information Technology sector with 0.88 percent and Insurance sector with 1.07 percent. The overall market breadth for the day was positive with 84 advancers against 37 decliners giving it an AD ratio of 0.20, the Financial Transaction House (FTH) said in its daily market commentary.

Qatar Islamic Bank climbed 0.6 percent, trimming its losses to 3.6 percent since reporting falling second-quarter profit, while Commercial Bank of Qatar added 0.9 percent, helping Doha's index edge higher. The Qatari index rose 0.2 percent to 6,935 points.

"Bank results were mixed - nothing too inspiring, but nothing too disastrous either," said a Qatar analyst who spoke on condition of anonymity. 

He said Qatar financial sector earnings-per-share fell 9 percent year-on-year in the second quarter, but rose 11 percent quarter-on-quarter, adding the latter figure was more important.

"Most banks had provisions in Q2, which would explain the year-on-year EPS fall. Quarter-on-quarter there was a pick up in loans, mostly driven by Islamic or government-related borrowing," he said.

Vodafone Qatar climbed 0.6 percent. After market hours it reported a narrowing quarterly loss.

"Qatar's population changes almost entirely every few years and most people are migrant workers, giving a big opportunity to company like Vodafone, which has an international brand," said Martin Mabbutt, Nomura telecoms analyst.

Former monopoly Qatar Telecom, which is forecast to report a 32 percent drop in second-quarter profit, rose slightly.

In Abu Dhabi, Aabar Investments climbed 9.9 percent after saying it would pay minority investors a higher price to buy back shares.

Aldar Properties fell 3 percent to a 16-month low, with market talk this drop was sparked by a bank closing margin positions, while the outlook for the developer is uncertain. 

"We don't forecast Aldar handing over much property in Q2 and the costs and interest expenses of carrying so much debt is dropping the bottom line into negative territory," said Chet Riley, Nomura property analyst, adding he expected Aldar to make a second-quarter loss of 130 million dirhams ($35.39 million).

"Aldar has increased the leverage on its balance sheet in recent quarters, not deleveraged." 

In Dubai, Emaar Properties fell 0.9 percent and developer Deyaar lost 1.3 percent. 

"UAE property stocks have been sold off and are starting to look attractive, but the problem is that there's no earnings predictability - it's a black box because project handovers are usually delayed, we don't know the default rate or the selling or construction prices," added Riley. 

The Dubai index dipped 0.6 percent to 1,510 points. The Abu Dhabi index rose 0.4 percent to 2,543 points.

Kuwait's Global Investment House < rose 9.8 percent to a four-week high after saying it had won a Dubai court case against a UAE bank.

The Kuwaiti index slipped 0.1 percent to 6,494 points.

The Omani index eased 0.05 percent to 6,223 points.

The Bahrain index climbed 0.2 percent to 1,404 points.
 
- With input from agencies