"We need to be cautious as global markets are still shaken by the probability of the US economy slipping back into a recession," said a Qatar analyst who asked not to be identified.

Investors are nervously awaiting monthly US jobless data, due out on Friday, said Hesham Tuffaha, Bakheet Investment Group head of research, because this is likely to impact oil prices.

OCI ended 0.7 percent higher, giving back most of its intraday gains. The developer's quarterly profit rose 41 percent to $144 million, boosted by strong prices of nitrate-based fertilizer to eclipse analysts' forecasts.

"This result is not enough for the stock to rally much today," said Ashraf Akhnoukh, senior equity sales trader at CIBC Brokerage. "They did not really beat expectations by far."

Dubai's index fell for a fourth session in five, with investors seeing little reason to buy shares in the absence of market-moving news. The benchmark fell 0.4 percent to 1,491 points.

Dubai Financial Market dropped 2 percent and developer Deyaar fell 2.3 percent to a record low. 

The Abu Dhabi index fell 0.4 percent to 2,499 points.

Emaar Properties dropped 0.6 percent as UAE developers struggled. Sorouh Real Estate fell 1.8 percent to 1.60 dirham after HC Research cut its price target to 1.90 dirham from 2.90, keeping a "hold" rating.

"We now exclude plot sales from our forecasts and assume property inventories will be sold no earlier than 2012 (estimated) as liquidity/demand recovers," HC wrote. "We now...assume all overdue receivables are unrecoverable."

The few active UAE speculators will target property stocks because these are the most liquid and volatile, said Wadah Al-Taha, a Dubai-based fund manager, but this is unlikely to herald a turnaround in the beleaguered sector's valuations.

"The imbalance between supply and demand will take longer to resolve," Taha added.

The Saudi index fell 0.2 percent to 6,072 points. Turnover fell to a seven-year low, said Bakheet's Tuffaha. 

The sector activity for the day was mostly negative with 11 losing sectors against 4 gaining sectors. The losing sectors ranged from 0.05 percent by the Energy & Utilities sector to 0.75 percent by the Retail sector. On the other hand the gaining sectors for the day ranged from 0.10 percent by the Insurance sector & Transport sector to 0.26 percent by the Hotel & Tourism sector. The overall market breadth for the day was negative with 40 advancers against 69 decliners giving it an AD ratio of 0.57, the Financial Transaction House (FTH) said in its daily market commentary.

Qatar's benchmark hit a new three-month high, gaining for a 10th session in 11. The index rose 0.3 percent to 7,219 points.

The Kuwaiti index edged up 0.01 percent to 6,667 points.

The Omani index eased 0.1 percent to 6,264 points.

The Bahrain index fell 0.6 percent to 1,423 points.

The Egypt stock index rose 0.06 percent to 6,469 points.