The Qatar stock market slid to a two-month low on Tuesday, weighed down by its blue-chips, while major Gulf bourses fell across the board, mostly pressured by financial shares.
Qatar's index fell 1.1 percent, with Vodafone Qatar losing 3.2 percent after approving a regulatory decision to reduce the nominal value of its shares to 1 riyal each.
Qatar National Bank, the largest lender by assets in the Middle East and Africa, dropped 2.7 percent and Industries Qatar slid 2.4 percent.
The Qatar exchange jumped 21 percent in 2018 to become one of the world's best-performing markets for the year, also helped by limits being lifted on foreign ownership of shares.
But the index has fallen 2.5 percent this year, with non-Qatari shareholders being the net sellers in this session.
"The Qatari market was artificially supported last year (since the embargo) by the government and related entities. It is expensive given the growth that it offers," Khaled Abdel Majeed, Managing Partner at MENA Capital said, adding the government might "probably" step in if the decline accelerates.
The Saudi index dipped 0.1 percent with Al Rajhi Bank sliding 0.3 percent and Saudi Basic Industries 2010.SE losing 0.2 percent.
But Al Yamamah Steel Industries surged 9.9 percent to a five-month high after it signed a $106.7 million contract to supply solar steel structure to the Dubai Solar Park Project.
Tadawul, Saudi Arabia's main stock exchange and the Middle East's largest, will join the FTSE Russell and MSCI emerging- market indices in March and May this year.
The Saudi stock exchange expects passive fund inflows of between $15 billion and $20 billion this year as it gears up for inclusion in emerging market benchmarks, its chief executive told Reuters.
Arqaam Capital said it still expects $20 billion of passive inflows just from joining MSCI and FTSE EM in 2019. Additional active inflows should take the total to $40-$60 billion.
Weakness in property stocks weighed on the Dubai index .DFMGI , which closed 0.3 percent lower. Emaar Malls dropped 2.9 percent and its sister company Emaar Development was down 3.1 percent.
Dubai property prices have been slipping from their mid-2014 peak and were partly behind the index's worst performance in local currency terms compared with other major global markets last year.
Although Dubai stocks have rallied this year, led by strong fourth-quarter results at real estate companies, an expected further fall in property prices is capping gains.
Nasdaq-Dubai listed DP World DPW.DI slipped 2 percent. The port operator has asked an Indian court to halt an investigation into alleged antitrust violations at the country's largest container port, in Mumbai, saying the regulator was seeking excessive information, Reuters reported.
Egypt's blue-chip index fell 0.6 percent with its largest lender Commercial International Bank Egypt sliding 2 percent and Egyptian Chemical Industries decreased 1 percent.
Egyptian Chemical provided an update on a project, saying cost may reach up to 15 billion Egyptian pounds ($859.35 million) after rehabilitation of existing factories.
Abu Dhabi's index was down 0.3 percent with the country's biggest lender, First Abu Dhabi Bank, falling 0.7 percent.
($1 = 17.4550 Egyptian pounds)
(Reporting by Ateeq Shariff in Bengaluru) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))