By Rachna Uppal

DUBAI, Nov 18 (Reuters) - Kuwaiti mobile telephone firm Zain's and logistics provider Agility took a beating on Wednesday and hammered the index to a 33-week low.
Zain tumbled 4.2 percent on a report that Indian state telecom company Bharat Sanchar Nigam Ltd could stay out of a group looking to buy 46 percent of the firm.
Agility dived 5 percent after a U.S. grand jury indicted the logistics firm on Monday over accusations of overcharging the U.S. Army to the tune of $60 million..
The index slipped 1 percent to 6,705 points, its lowest close since March 30.
Lack of transparency about Zain's stake sale and concern over the Agility's revenue outlook have raised expectations of a further slump on the troubled Kuwait market, where several firms are yet to announce third-quarter results.
"In the next few weeks, the market could retest previous lows of around the 6,400 levels," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.
Qatar and Oman were the only markets to buck a downward trend that dominated Gulf Arab bourses, which have lagged the recovery among other emerging markets.
Investors booked profits in Dubai as the index continued a correction mainly in property and banking stocks.
Bellwether Emaar Properties fell 1.6 percent, and Emirates NBD slipped 2.2 percent.
"The market is not able to break the resistance of 2,200 in Dubai, and 3,000 in Abu Dhabi," says Chamel Fahmy, senior regional sales trader at Beltone Financial. "Volumes are still weak."
Dubai's index retreated 1.4 percent lower to 2,147 points, its fourth decline in five sessions. Abu Dhabi's benchmark and that of Saudi Arabia also ended slightly lower.
"International investors ... are more longer-term oriented, and are less likely to return to the table faster," said Daniel Broby, chief investment officer at Silk Invest.
Gulf markets are "very compelling as a story for next year, and the trigger will be the first quarter earnings season. We will probably get earnings surprises in the first quarter, this will bring investors back to the markets", he said.
Qatar's index ended 2 percent higher, led by gains in the banking sector. Qatar National Bank, the country's largest by market capitalisation, added 2.7 percent, Qatar Islamic Bank advanced 3.2 percent, and Commercial Bank of Qatar rose 3.1 percent.
The rise came after the government raised $7 billion in a three-tranche bond sale this week. The proceeds are expected to help state-owned companies.
Banks also helped lift Oman's benchmark, which ended just marginally higher at 6,388 points.
"Local institutions are rebuilding positions in the banking sector," said Adel Nasr of United Securities.
"Volumes have been hit. But at least prices are witnessing some stabilisation."
Bahrain's index slipped 0.05 percent to 1,443 points.

WEDNESDAY'S HIGHLIGHTS

* The measure declined 1 percent to 6,705 points.

* The index retreated 1.4 percent to 2,147 points

* The measure fell 0.5 percent to 2,950 points.

* The benchmark declined 0.2 percent to 6,319 points.

* The index advanced 2 percent to 7,127 points.

* The measure advanced 0.1 percent to 6,388 points.

* The benchmark slipped 0.05 percent to 1,443 points.

(Additional reporting by Matt Smith; Editing by Inal Ersan) Keywords: MARKETS MIDEAST STOCKS (rachna.uppal@thomsonreuters.com; +971 4 391 8301; Reuters Messaging: rachna.uppal@thomsonreuters.com@reuters.net)

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