Saudi Arabia's stock index edged down in the first hour of trade on Tuesday while Egypt's rose in thin volumes.
The Saudi benchmark climbed in the opening minutes but then turned lower, losing 0.4 percent. Food producer Savola plunged 8.9 percent after Saudi Arabia said it would cut off all commercial relations with Iran in its row following Riyadh's execution of a Shi'ite cleric in the kingdom.
Savola is one of the few Saudi companies with a presence in Iran, with edible oil and confectionary factories in Tehran. It has not yet released a statement on the impact on its business of geopolitical tensions, and analysts said there would not necessarily be a big impact.
"Savola's Iran business is a separate company with strong local partners, so the impact on the company may be minimal," said a Riyadh-based equity analyst.
But the Saudi petrochemical sector was also soft. Heavyweight Saudi Basic Industries slid 0.7 percent and Advanced Petrochemical retreated 3.0 percent.
Both companies announced last week that their operating costs would increase after the government reduced price support for natural gas feedstock and hiked electricity tariffs.
Some banks recovered part of the previous session's losses. Islamic lender Alinma rose 1.1 percent, after sliding 3.7 percent on Monday. Al Rajhi, the largest retail Islamic bank, advanced 1.4 percent, heading towards its fourth session of gains.
Cairo's main benchmark rose 0.5 percent as property-related stocks led gains, with El Saeed Contracting and Real Estate Investment and Talaat Mostafa Group each advancing more than 2 percent.
