Thin news flow and upcoming Islamic holidays towards the end of the week kept many long-term equity investors away on Sunday, leaving stock markets in the Middle East vulnerable to profit-taking, but Kuwait's index bucked the trend.
"Speculators are booking capital gains while long-term investors were dormant," said a Jeddah-based broker.
Stock markets are often sparsely traded ahead of Eid al-Adha, he noted. The holidays will start on Wednesday in Saudi Arabia and Thursday in the United Arab Emirates.
The Riyadh index retreated 0.3 per cent on Sunday as some of last week's best-performing banks fell; National Commercial Bank, which was up 5.4 per cent last week, lost 1.5 per cent.
Saudi Arabia Fertilizers Co fell 0.8 per cent after its board proposed a first-half cash dividend of 0.75 Saudi riyal per share, down from 1.5 riyals for the first half of 2016.
But Al Tayyar Travel Group rose 1.9 per cent in relatively active trade after the company said it was still "carrying on its business dealings" with the Ministry of Education.
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The company had previously stated that on average 30 per cent of its total yearly revenue came from contracts with the ministry, and there was concern among some investors that Al Tayyar might lose a long-term contract with the government amid Riyadh's austerity measures.
In the UAE, Dubai's index fell 0.6 per cent as some shares favoured by speculative investors weakened, including GFH Financial Group, which lost 3.3 per cent.
Abu Dhabi's index slipped 0.3 per cent with the main drag coming from property-related shares; heavyweight Aldar Properties fell 1.3 per cent.
Kuwait's index rose 0.4 per cent in healthy volume, supported by gains in blue chips. Boubyan Petrochemical jumped 3.8 per cent and Kuwait Finance House rose 1.0 per cent.
At the end of September, index compiler FTSE will announce its decision on whether to include Kuwait and Saudi Arabia in its secondary emerging market index. Analysts at Arqaam Capital believe the chances for both Saudi Arabia and Kuwait to meet FTSE's inclusion criteria are high, but a bleak domestic economic outlook has been weighing on Saudi Arabia.
"We expect Kuwait to have a weight of 0.54 per cent in the FTSE EM + China A All Cap Index, equivalent to US$455 million in inflows," Arqaam Capital said in a report this month.
The Kuwaiti index has outperformed its counterparts in the six-nation Gulf Cooperation Council this year; it is up by almost one-fifth since January 1.