Thin participation by local funds and sideways movement of the markets for the past several weeks limited losses.
Local investors are likely to hold back on building new positions until they get more clarity on whether Greece will be given aid to avoid default and how European banks are managing the crisis.
“We’re waiting for more guidance from Europe before we can justify putting more cash on the table,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
Kuwait’s shares fell to a two-week low on fresh political tensions after a protest rally late Wednesday.
The index drops 0.7 percent to its lowest close since Sept. 7.
Volumes slumped to a three-week low as investors remain largely on the sidelines, waiting for tensions to ease.
In Dubai, real estate stocks, the usual target of retail-investor trading on short-term investments, dragged the index 0.8 percent lower to its lowest close since Sept. 12.
Contractor Arabtec fell 0.7 percent, accounting for nearly a third of all shares exchanging hands. Emaar Properties, the largest stock on the index by market capitalization, dropped 1.1 percent and Drake & Scull declined 2 percent.
In Oman, the index slipped 0.7 percent to its lowest close since Sept. 13.
Oman International Bank was the most traded stock, dropping 2.6 percent. Heavyweight Bank Muscat fell 1.3 percent and Bank Sohar slipped 0.6.
Bluechip Renaissance Services declined 1 percent.
“We advise investors to follow a wait-and-watch policy in the coming trading sessions owing to the higher level of (global) instability and also avoid high beta counters,” Gulf Baader Capital Markets wrote in a note to clients.
“Expect the index to see support at about 5,690 points.”
Elsewhere, Doha’s bourse ended 0.6 percent lower, slipping from Wednesday’s 11-week high.
Industries Qatar fell 2.7 percent, Qatar Islamic Bank shed 1 percent and Barwa Real Estate slipped 1.2 percent.
Local economies however, are expected to withstand the global doom, with government spending strengthening growth outlook.
“After the recent Arab spring, GCC governments realized that social spending, job creation, and education are key to social and economic stability,” said Joseph Kawkabani, Franklin Templeton Investments (ME) chief investment officer of equities.
“Even if the global economy might slow down, government spending in the Gulf will act as a buffer backed by healthy sovereign balance sheets.”
Companies in sectors linked to infrastructure, telecommunication, and consumer spending will do relatively well, he added.
Qatar aims to invest billions of dollars in an agricultural city to house food growers and processers, in an effort to increase its food supply security and combat rising food prices, a government official said on Wednesday.
