On a day of mixed markets in the region, all but three stocks fell on Egypt's 30-company index, which shed 1.3 percent to 6,733 points. The market was pessimistic over Orascom as Algerian tax claims overshadowed a deal to sell more than half of the firm to Russia's Vimpelcom.

"There is a lot of noise around the stock. That's why it's triggering a lot of sellers. I think it was very much oversold today," said Mohamed Radwan of Pharos Securities.

Orascom, facing over $800 million in back-tax claims on its Algerian unit, fell 4.1 percent in heavy trading.

Brokers said OT's Algerian difficulties were complicating a the Vimpelcom deal.

Naguib Sawiris, OT's chairman, is to lose control of Greek telecom business Wind Hellas after creditors emerged as the preferred bidders on Monday.

In Qatar, banking stocks declined as the index dropped to a two-week low as investors booked profits. The index fell 1.3 percent to 7,722 points.

Commercial Bank of Qatar (CBQ) fell 2.6 percent, a day after reporting a 28.9 percent jump in third-quarter net profit. Doha Bank also slipped 1.8 percent. It posted a 37 percent rise in quarterly net profit.

"The earnings reports have been quite good and Qatar is the best performing market in the region, rising 12 percent this year." said Shakeel Sarwar, head of asset management at Securities and Investment Company Investment Co. (SICO).

"The fundamental reason for a decline today is ... profit-taking seen across the region. This is strongest in Qatar." The index slipped 1.3 percent to its lowest since Oct 5.

In Dubai, bluechips reversed early losses to help the emirate's index reach its highest level this week. The index gained 0.6 percent to 1,755 points.

Dubai Islamic Bank (DIB) led a late rally, gaining 5.1 percent to reach a six-month high.

"Investors are probably expecting DIB's earnings to be positive," says Vyas Jayabhanu, head of investments at Al-Dhafra Financial Broker. "It is seen as a company that does not have much exposure to bad debt."

Emaar Properties gained 0.3 percent after falling in the previous four sessions.

"MENA markets this week will move sideways to down on profit-taking and global factors but it will pick up by the end of the year," said Jayabhanu.

Emirates Telecommunication Corp. (Etisalat) suffered its biggest daily percentage drop in three months, weighing on the broader Abu Dhabi index.

The Abu Dhabi index fell 0.8 percent to 2,786 points.

The telecom firm declined 2.1 percent a day after it reported a 23 percent fall in third-quarter net profit.

The Tadawul All-Share Index (TASI) declined 0.53 percent to 6,230.15 points. The sector activity for the day was completely negative closing with losses ranging from 0.04 percent by the Cement sector to 2.04 percent by the Building & Construction sector. The overall market breadth for the day was negative with 23 advancers against 110 decliners giving it an AD ratio of 0.21, the Financial Transaction House (FTH) said in its daily market commentary.

The liquidity for the day reached SR2.43 billion.

The Kuwaiti index retreated 0.3 percent to 6,998 points.

The Omani index ended 0.3 percent lower at 6,534 points.

The Bahraini index gained 0.04 percent to 1,466 points.
 
- With input from agencies