Egypt's main index fell 3.6 percent to 4,095 points, dragged by concerns about the looming demonstration on Friday against emergency law. Trading was suspended for half an hour after the broader benchmark slumped 5 percent.    

"This is true panic from the local side," Omar Darwish of CIBC Brokerage said. "It is really low volumes and no buyers are around."   

Palm Hills Development, the country's second-biggest listed developer, slumped 8.2 percent. 

Ezz Steel dropped 9.9 percent while Telecom Egypt lost 3.8 percent.    

"We are seeing new lows for a lot of stocks as the political side is overriding positive corporate news," said Teymour el Derini, sales manager in foreign markets at Naeem Brokerage.   

In Saudi Arabia, petrochemical stocks led declines as global headwinds spurred investors to cut positions on the last day of the Saudi trading week.     

The Tadawul All-Share Index (TASI) fell for a first day in three, dropping 0.26 percent to 6,112.37 and taking its year-to-date losses to 7.7 percent.  

The petrochemical index slipped 0.4 percent, with Saudi Basic Industries Corp. (SABIC) down 0.3 percent. 

"Q3 has been volatile for global markets as commodities enter bear territory, Europe's debt crisis remains unresolved and structural weakness gains momentum in the US — the Saudi market is not immune to broader trends," Asim Bukhtiar, head of research at Riyad Capital, wrote in a note to clients. 

In Dubai, property stocks dragged down the benchmark 0.7 percent to 1,438 points — its lowest close since March 8. 

Contractor Arabtec dropped 2.2 percent and Emaar Properties shed 1.4 percent. 

Abu Dhabi's index closed 0.4 percent lower, hovering near Monday's seven-month low. 

"We're drifting lower on lack of major catalyst to warrant local buying," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading. 

"What's happening in Europe is keeping people on the sideline. There is a reluctance to put cash to work, (with investors) thinking there's no upside till end of the year." 

In Oman, the index slumped 0.6 percent to 5,612 points — a fresh five-week low, mostly due to selling by foreign funds.  

"Foreigners accelerated their selling today, there was strong pressure on Bank Muscat," said Adel Nasr, United Securities brokerage manager. "They are shifting money to developed markets where valuations are very cheap." 

Heavyweight Bank Muscat slipped 1.8 percent, and Renaissance Services shed 2.9 percent. 

"It's obvious GCC (Gulf Cooperation Council) economies are not suffering and GDP will be strong because of high oil prices, but our markets are not reacting to that," Nasr said. 

Bahrain's index fell 1.4 percent to 1,183 points, as Aluminium Bahrain fell for a fifth as the state plans to raise its gas prices. The stock slumped 9.7 percent.

The Kuwaiti index eased 0.08 percent to 5,849 points. 

The Qatar index edged up 0.05 percent to 8,422 points.