Most Gulf Arab markets fell on low volumes on Sunday as declining oil prices and losses on global exchanges late last week soured regional sentiment.
Dubai's index fell 3.6 percent, Kuwait and Qatar lost 1.9 and 1.6 percent respectively and Bahrain, Abu Dhabi and Oman also retreated. Egypt's measure fell 1.1 percent, its first decline in four trading days.
Saudi Arabia's benchmark bounced back from Saturday's two-month closing low, which may indicate Sunday's broad regional decline will prove temporary.
"For the rest of the month, markets will be driven by second-quarter results and global investor sentiment," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.
Oil prices fell below $66 a barrel on Friday after worse-than-expected U.S. unemployment data hardened views that economic weakness would sap energy demand.
The U.S. jobless rate hit a 26-year high.
The jobless figures sent U.S. stocks tumbling late on Thursday and Asian shares fell the following day. U.S. markets were closed on Friday for the holiday weekend.
"The U.S. employment figures were shocking and it looks like the green shoots will turn into brown leaves," said Sunil Dhall, vice-president at Gulf Baader Capital Markets in Muscat.
"Oil is under pressure and it doesn't seem as though the situation in the West will improve anytime soon."
Oil's fall after a rally last month is eroding investor confidence in the Gulf region, home to most of the world's top crude exporters.
Emaar Properties weighed on Dubai's index.
The company's share price plunged 7.1 percent a day after announcing the closure of its Algerian office because of a lack of progress in what was slated to be $20 billion worth of projects.
"There are a lot of questions surrounding Emaar and the company hasn't provided enough answers," said Wadah al-Taha, a Dubai-based financial analyst. "There's no proper explanation for closing its Algeria office - why and why now?"
Qatar's index fell to a two-month low as trading volumes slumped to their lowest level since mid-February.
"People are waiting for second-quarter results, with Qatar National Bank announcing their earnings this week," said Osama Rayyan, chief dealer at Dlala Brokerage & Investment Holding.
"QNB will have a big impact on the market and will set the trend for the banking sector, which accounts for about 60 percent of the index weighting."
Activity on other markets is also waning, with Saudi Arabia's volume the lowest since late March, while Dubai and Abu Dhabi trading slipped to seven-week lows.
Banks across the region struggled as investors fret over potential exposures to Saudi Arabia's Saad Group and Ahmad Hamad Algosaibi Group & Bros, which are restructuring billions of dollars of debts.
"People are lowering their expectations for banks' quarterly earnings, with rumours circulating that many other Saudi groups beside Saad and Algosaibi will default on debts," says Gulf Baader's Dhall.
These worries did not prevent Saudi Arabia's index from climbing 0.5 percent as Saudi Basic Industries Corp (SABIC) and Rabigh Refining and Petrochemical Co bounced back after plummeting to two-month lows on Saturday following oil's fall.
TRADING HIGHLIGHTS
In Saudi Arabia, the index climbed 0.5 percent to 5,497 points.
In Dubai, the measure fell 3.6 percent to 1,756 points.
In Abu Dhabi, the index fell 1.3 percent to 2,637 points. Dana Gas lost 4.4 percent.
In Egypt, the measure slipped 1.1 percent to 5,902 points.
In Qatar, the benchmark dropped 1.6 percent to 6,370 points, falling for the fourth session in six. Qatar National Bank lost 2 percent.
In Oman, the index slipped 0.3 percent to 5,677 points.
In Kuwait, the index fell 1.9 percent to 7,954 points. Boubyan Bank dropped 6.9 percent.
In Bahrain, the measure fell 0.1 percent to 1,589 points.