Investors had bet high oil prices would boost petrochemical producers’ earnings, so SAFCO’s results sparked sector-wide selling, dragging Saudi Arabia’s petrochemicals index down 1.6 percent, its biggest decline in five weeks.

SAFCO’s shares dropped 1.9 percent to their lowest finish since June 20.

“Ammonia and urea prices have increased over 10 percent quarter-on-quarter, so analysts were expecting better earnings from SAFCO,” said Ankit Gupta, senior research analyst at Securities & Investment Co. (SICO) in Bahrain.

Shares in Saudi Basic Industries Corp. (SABIC) slid 1.4 percent.

The Tadawul All-Share Index (TASI) fell 0.7 percent to 6,581 points.

Cairo’s benchmark index fell 1.7 percent to a seven-week low. Tens of thousands of Egyptians packed city centers over the weekend to demand faster reforms and voice frustration at what they regard as foot-dragging by military rulers and government officials.

The protests have been peaceful, but demonstrations continued on Sunday.

“There are still worries over the reaction of the protesters because they still feel their demands are not met — I think we are not in a stable position,” said Margo Moussa, an analyst at Arab Finance Brokerage.

Banks lifted Abu Dhabi’s benchmark ahead of quarterly results, with lenders’ earnings seen as a barometer for the health of the UAE economy.

“If any (UAE) sector’s shares will move on results, it will be banks — they are the main barometer of the economy and any pick up in loans will be taken very positively by the market,” said Rami Sidani, Schroders Middle East head of investment.

National Bank of Abu Dhabi and First Gulf Bank added 0.9 and 1.1 percent respectively, while Abu Dhabi Islamic Bank gained 1.5 percent.

Dubai’s Emaar Properties rose 1 percent, cutting its 2011 losses to 13 percent. The firm is forecast to report a 55-percent drop in second-quarter profit.

“The UAE is more of a long-term story and a function of the risk appetite regionally and globally,” added Sidani.

“Investors are waiting to see real estate prices pick up, as well as general sentiment. Given the oversupply in Dubai, it might take some time to see an improvement. Companies are trading at cheap valuations, so the worst is already priced in.”