"VAT has squeezed the purchasing power of consumers and as a result affected the retail market," said Jassim al-Jabran, senior analyst at AlJazira Capital. "For Almarai
, the main impact has been on its dairy segment because of the competition it was facing forcing it to reduce prices."
Insurance companies continued to be among the best performers in the Saudi exchange, still benefiting from expectations of a surge in business after women started driving in the kingdom last month.
United Cooperative Assurance Company was the best performer, gaining 5.7 percent.
In Dubai, where the index was up 0.2 percent, Amanat Holdings AMANT.DU was the company that posted the largest gains as it jumped 6.7 percent. The investment firm said last week that it has agreed to acquire Middlesex University's campus in Dubai, which is partly owned by embattled private equity company Abraaj.
Ajman Bank added 0.4 percent after announcing a net profit of 45 million dirhams ($12.25 million) in the second quarter of this year, up from 29.3 million last year.
Dubai’s contractor Drake & Scull International (DSI), one of the worst-performing stocks on the Dubai index, lost 0.3 percent.
The company has been lagging because of concerns about its financial position, business outlook and the outcome of an investigation into "violations" by previous management.
In Bahrain, Aluminium Bahrain gained 0.8 percent after reporting a second quarter annual increase in sales and production of 19 percent and 23 percent, respectively. The Bahraini index added 0.4 percent.
In Qatar, stocks in financial institutions posted significant gains ahead of second quarter financial results disclosures, expected to start later this week. Qatar Islamic Bank and heavyweight Qatar National Bank were both up 2.3 percent and 1.9 percent, respectively. The Qatari index was up 0.7 percent.
* The index gained 0.6 percent to 8,223 points.
* The index climbed 0.2 percent to 2,885 points.
* The index added 0.3 percent to 4,615 points.
* The index increased 0.7 percent to 9,325 points.
* The index went up 1.4 percent to 5,254 points.
* The index gained 0.4 percent to 1,336 points.
* The index shed 0.1 percent to 4,520 points.
* The index lost 1.8 percent to 15,840 points.
($1 = 3.7503 riyals) ($1 = 3.6728 UAE dirham)
(Additional reporting by Tom Arnold; Editing by Elaine Hardcastle) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: firstname.lastname@example.org))