Real estate stocks weighed on Dubai's index which retreated after hitting a five-month closing high on Monday with bellwether Emaar Properties falling 0.8 percent and down 1.8 percent.

"Dubai's market hit the resistance level of 1,750, 1,755 so we were due for some profit-taking," said Musa Haddad, head trader in asset management at National Bank of Abu Dhabi.

"It's the season of earnings so if institutions want to get into the market on the fundamental side, they'll wait until the Q3 figures, and depending on the momentum from that, they will get in. The longer term trend is still up."

The Dubai index retreated 0.7 percent to 1,743 points. The Abu Dhabi index slipped 0.3 percent to 2,712 points.

In Saudi Arabia, the Tadawul All-Share Index (TASI) dropped 0.38 percent to 6,343.86 points. The sector activity for the day was mostly negative with 9 losing sectors against 5 gaining sectors. The losing sectors ranged from 0.08% by the Media and Publishing sector to 0.71% by the Banks & Financial Services sector. On the other hand the gaining sectors ranged from 0.01 percent by the Cement sector to 2.73 percent by the Energy & Utilities sector, except the Hotel & Tourism sector had no change for the day. The overall market breadth for the day was negative with 48 advancers against 70 decliners giving it an AD ratio of 0.68., the Financial Transaction House (FTH) said in its daily market commentary.

The liquidity for the day reached SR2.20 billion.

In Egypt, the market ended 0.3 percent higher at 6,824 points after reports that Egypt's largest steel producer, Ezz Steel, may bid for new production licenses.

Kuwait's index also ended higher as volumes rose, led by banks on optimism for third quarter earnings. The benchmark rose 0.7 percent to 7,055 points.

Kuwait Finance House rose 3.3 percent as did Al Ahli Bank. Gulf Bank climbed 3.9 percent.

"In the banking sector, the market is expecting growth in the third quarter, more than in the first two quarters, so this is positive on the market," said a Zummoroda Investment trader.

"The market will remain volatile for the time being but the trend is up."

National Bank of Kuwait (NBK), the country's largest bank, posted a 5.7 percent rise in third-quarter net profit after market hours, exceeding estimates as its foreign expansion strategy reaped rewards.

The Qatari measure declined 0.9 percent to 7,756 points.

The Omani index inched up 0.1 percent to 6,504 points, while the Bahraini index climbed 0.8 percent to 1,472 points.
 
- With input from agencies