Cairo's bourse opened 5 percent lower in its biggest decline since the Egyptian Exchange reopened following a seven-week shutdown due to the popular uprising that toppled President Hosni Mubarak.

The index closed 2.3 percent lower at 3,938 points, its level since March 2009.

In Saudi Arabia, insurance stocks rallied as upbeat sentiment in world stocks lent support. 

The benchmark Tadawul All-Share Index (TASI) rose 0.61 percent to 6,136.97.

"There is volatility and an uncertainty trend for the market ahead of the Q3 results," said Tarek Al-Madi, an independent Riyadh-based financial analyst.

Saudi Re of Cooperative Insurance jumped 8.6 percent, accounting for the largest exchange of shares. Sanad climbed 0.7 percent.

"The leader stocks and the insurance stocks are the top-picks for the speculative and long-term investors, because of their high liquidity," he said.

"The market will take the cue from results of the leader stocks like SABIC (Saudi Basic Industries Corp.) and Al-Rajhi and then the speculative trading will start on the rest of the stocks." 

SABIC, the world's largest chemicals producer, gained 0.5 percent.

Yanbu National Petrochemical climbed 1.1 percent.

Petrochemical stocks were supported by gains in oil prices, which impact their bottom line.

Banks also rose with Samba Financial Group up 1.2 percent. But bellwether Al-Rajhi Bank ended flat.

In UAE, property stocks fell as Emaar Properties shed 1.5 percent. Dubai's index dipped 0.6 percent to 1,390 points.

Analysts polled by Reuters expect Emaar's net profit to drop by about 37 percent.

Builder Arabtec slipped 2.3 percent.

Abu Dhabi's Aldar Properties declined 1.8 percent and Sorouh Real Estate shed 1.9 percent.

"Especially with real estate companies in UAE, I don't think we will see any positive surprises," said Shakeel Sarwar, head of asset management at Securities & Investment Co (SICO) in Bahrain. "The sector is going through a consolidation phase and the view right now is long term."

Abu Dhabi's benchmark eased 0.07 percent to 2,498 points, extending 2011 losses to 8.2 percent.

In Qatar, the index climbed 0.2 percent to 8,285 points as banks support.

Commercial Bank of Qatar gained 0.9 percent, Qatar Islamic International Bank rose 1.4 percent and Qatar National Bank climbed 0.1 percent.

The Gulf state's banks are expected to post strong third-quarter earnings as government spending boosts consumer confidence and banks increase lending.

The Omani index climbed 0.05 percent to 5,567 points.

The Kuwaiti index eased 0.08 percent to 5,848 points.

The Bahrain measure slipped 0.9 percent to 1,154 points.