Egypt's benchmark .EGX 30 tumbled on Wednesday in the first day's trading since the fall of former president Hosni Mubarak, but Gulf Arab markets were steady in light trade.

"Once Egypt's market stabilises, foreign flows will come back strongly into regional markets, especially Oman, Qatar and Saudi Arabia because they offer the best valuations," said a Riyadh-based trader who asked not to be identified.

Saudi Arabia's index rose 0.3 per cent to a four-week high as investors looked to the country's upbeat economy, with extra state spending announced last week well received by investors. The measure is down 3.9 per cent this year.

"We've made a V-shaped recovery from the market meltdown, but people have yet to price in increased petrochemicals prices," said the Riyadh-based trader, says the trader.

Banks and petrochemicals are the two main sectors on Saudi's bourse, with the latter's prices closely tied to oil.

Dubai hit a month-high, but is in the red for 2011.

"It's very positive for UAE markets that they haven't reacted to Egypt," said Mohammed Yasin, CAPM Investment chief investment officer.

State-owned conglomerate Dubai World signed a final agreement with its 80 creditors on Wednesday to restructure debt worth US$24.9 billion.

"This confirms the deal is done -- it was already priced into markets," said Yasin. "The investment community is not pricing in a delay in debt repayment from Dubai entities this year."

Dubai's index was among the hardest hit as unrest in North Africa sparked protests in Arab neighbours Oman and Bahrain.

"That wasn't justified, so there's more room for UAE markets to rise -- expectations are for companies to have a better year in 2011," said Yasin.

Ports operator DP World fell 0.3 per cent after hitting a five-week intraday high. The company reported a 35 per cent rise in 2010 profit to $450 million.

Kuwait's index slipped 0.6 per cent to be within 160 points of 7 March's six-year low.

"Kuwait will remain volatile -- fundamentals are not there," said Badr al Ghanim, Global Investment House vice-president of asset management. "If you look at valuations, the market doesn't look very attractive."

Zain, which climbed 1.5 per cent, is the only one of Kuwait's 20 largest stocks to rise.

"We don't expect many surprises for Q1 earnings," said Al Ghanim. "Banks haven't done anything exceptional this year -- lending growth wasn't there. We don't expect a drop in profits, but we also don't expect growth."

Qatar's benchmark fell for third day as volumes hit a four-month low, with shares in bellwether Industries Qatar suspended for a board meeting.

Foreign funds have returned to Qatar, having previously left amid regional unrest, but are now shorter-term investors, said Hani Girgis, assistant chief dealer at Dlala brokerage.

"They can exit any time, which has a negative impact on our market," he said.