"The second-largest economy has seen significant increases in COVID cases, which increased concerns about an economic slowdown and disruptions of the global trade network."

The benchmark index in Saudi Arabia ended flat, with Banque Saudi Fransi declining 2%.

In early trade, the index opened on the upside supported by US inflation figures and oil prices.

Oil prices, a key catalyst for the Gulf's financial markets, declined after the International Energy Agency (IEA) said the spread of the Delta variant of the coronavirus would slow the recovery of global oil demand.

However, the index was able to register its third weekly gain.

In Qatar, the index was also flat. Qatar's emir on Wednesday named an ambassador to Saudi Arabia after Riyadh in June reinstated its envoy to Doha, in another sign of improved ties after rival Gulf states agreed this year to end a long-running dispute.

Dubai, Abu Dhabi, Egypt markets were closed for a public holiday.

SAUDI ARABIA was flat at 11,324

QATAR traded flat at 10,920

BAHRAIN gained 0.5% to 1,631

OMAN fell 0.1% to 4,002

KUWAIT added 0.1% to 7,208.