DUBAI - Saudi Arabia's stock market edged down in early trade on Thursday while Dubai rose as its top real estate firm, Emaar Properties , gained after pricing the initial public offer of its local development unit.

The Saudi index was 0.2 percent lower after 20 minutes as real estate firm Dar Al Arkan , the most heavily traded stock, sank 1.6 percent. It has been volatile in heavy volumes over the past week, after announcing strong quarterly earnings.

Wednesday's 1.0 drop by the Saudi index raised doubts over the extent to which state-linked funds are still willing to support that market.

Since the announcement of the Saudi anti-corruption probe at the beginning of last week, state-linked funds have been buying stocks towards the close each day to prevent Riyadh's market from falling significantly, asset managers say -- until Wednesday, when the funds' activity appeared to decrease.

Dubai's stock index edged up 0.2 percent as Emaar Properties climbed 0.6 percent. It priced the IPO of its unit Emaar Development at 6.03 dirhams per share, against an indicative range of 5.7-6.9 dirhams set earlier this month.

Some fund managers said the pricing was lower than Emaar could have achieved given the size of institutional demand, and that Emaar seemed to be accepting a lower pricing to make sure retail investors bought into the IPO.

Qatar climbed 0.6 percent as real estate company Ezdan Holding rebounded 1.2 percent after plunging 6.5 percent on Wednesday, following its downgrade to junk status by credit rating agency Standard & Poor's.

(Reporting by Andrew Torchia; Editing by Catherine Evans) ((andrew.torchia@thomsonreuters.com)(+9715 6681 7277)(Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))