Saudi Arabia's bourse made its largest one-day decline in eight months on Sunday and most other regional markets also fell as investors sold off ahead of an expected drop in global markets on Monday.

The kingdom's index dropped 1.9 per cent, its biggest daily decline since August 20. Shares worth SR18 billion ($4.80 billion) exchanged hands.

The market is still up nearly 20 per cent this year and analysts had warned it was over-bought. US stock futures fell more than one per cent on Friday after US payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs.

World markets look poised to fall this week even as the focus shifts to the beginning of earnings season. 'We can attribute this to American markets which are showing a big drop tomorrow,' said Mohammad Omran, an independent financial analyst based in Saudi Arabia.

'We need a sign of recovery to stop the losses at this stage or this week will be the worst for Saudi since the start of the year. The downtrend is likely to continue for the next few days,' he added.

Technical analysis suggests the index has support between 7,500 and 7,600 points. Petrochemical and banking shares fell, with these two the largest sectors on the kingdom's bourse.

Bellwether Saudi Basic Industries Corp (SABIC)  slid 1.9 percent, Al Rajhi Bank declined 0.9 percent and telecoms operator Etihad Etisalat (Mobily) shed 2.2 per cent.

In Dubai, contractor Arabtec led declines as the index fell for a second session, down 1.1 per cent. Shares in the builder dropped 4.4 percent, down for a second session since Wednesday's four-week high.

The stock had surged after Abu Dhabi's Aabar Investments doubled its stake in Arabtec. The emirate's benchmark is moving within a tight range as it consolidates following sharp gains in the first quarter. It is up 23.3 per cent in 2012.

'Dubai will continue its flat movement between 1,640 and 1,720 points in the short-term,' said Mohabeldeen Agena, head of technical analysis at Cairo's Beltone Financial.

Investors are waiting for first-quarter earnings to give the market direction. Telecoms operator du slipped 2.3 percent, Deyaar Development shed 2.9 percent and Air Arabia  lost 1.3 percent.

Elsewhere, Qatar's index fell for a fourth consecutive session, down 0.5 percent, as it made its largest one-day decline in a month.  

'Qatar lost some steam after its late-March rally, falling short of key resistance at 8,910, but the battle for higher ground isn't over yet,' said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital.

'What we're seeing now might be an interim dip ahead of earnings releases, which, if robust, can drive sentiment higher.'

Heavyweight Qatar National Bank slipped 0.4 percent, Islamic lender Masraf Al Rayan shed 0.7 percent and Commercial Bank of Qatar dipped 0.9 percent. Losers outnumbered gainers 14 to four.

Heavyweight stocks such as Industries Qatar (IQ)  and Qatar Islamic Bank (QIB) are expected to report their quarterly earnings this week and valuations are still attractive, said Aboulhosn.

'The Doha index still trades at nine times trailing earnings with a dividend yield in excess of 4 percent, which is one of the highest regionally,' he added. IQ ended 0.5 per cent lower, while QIB ticked up 0.1 per cent.-Reuters