Saudi Arabia's stock market appeared to be stabilising in early trade on Wednesday but Egypt's bourse fell further after moving below an important technical support level.
Oil prices, which have been the main factor driving equities sell-offs across the Middle East this week, steadied on Wednesday and Brent even edged up after Chinese equities turned around and closed higher following a sharp drop on Tuesday.
Saudi Arabia's stock index was down 0.3 percent after its first hour of trade, having tumbled 10 percent earlier this month.
Many stocks rebounded and petrochemicals giant Saudi Basic Industries rose 1.2 percent. Thursday will be the last trading day when buyers of the stock are eligible for a dividend which is now worth more than 6 percent of the share price.
But analysts remain cautious about the market.
"Oil is currently trading 8 percent off its low while Dubai and Saudi are 27 percent and 14 percent off their respective lows during the same period. In other words, there is room for further downside," Adel Merheb, director of equity capital markets at Dubai's Shuaa Capital, said in a note.
Meanwhile, Egypt's stock index dropped 2.1 percent to 7,241 points after falling below chart support at its July low of 7,527 points in the previous session.
Nearly all stocks were down and carpet maker Oriental Weavers tumbled 4.5 percent after the state competition watchdog accused it of "monopolistic practices" and referred it to the public prosecutor.
The company, which has denied the accusations, could be fined up to LE300 million ($38 million) if a court rules against it.
