* Many Egypt investors not deterred by weekend violence
* Market pulled down by OCI as tender period expires
* Investors optimistic about Kuwait election result
* Arabtec falls as rights issue shares start trading
* UAE may move sideways after Q2 earnings
By Nadia Saleem
DUBAI, July 28 (Reuters) - Egypt's bourse fell on Sunday but the main reason was a tumble in the shares of heavyweight Orascom Construction Industries, not the deaths of dozens of supporters of ousted president Mohamed Mursi.
Cairo's index opened higher but then retreated to close 0.7 percent lower in thin turnover. Last week it hit a two-month high after rallying 20 percent since late June because of hopes for better economic management under Mursi's successor.
Security forces shot dead dozens of people at the weekend, and there was potential for more bloodshed as thousands more Mursi supporters continued to protest on the streets. But analysts and traders said many investors were willing to accept such violence as long as they thought it would not derail Egypt's transition to civilian rule in coming months.
"People are optimistic the army got rid of the fascist regime," said Amr Reda, assistant vice-president for the foreign sales desk at Pharos Securities.
"The violence was expected and the main driver is the stress from the army they will go ahead with the set roadmap," he added, referring to the military's transition plan, which aims to hold parliamentary elections within about six months.
The factor which pulled the market down on Sunday was a slide in Orascom, the most heavily weighted stock, which fell 5.0 percent to 238.50 Egyptian pounds as a tender offer for its shares by Dutch-listed affiliate OCI NV expired.
During the tender period, priced at 255 pounds, investors had been buying Orascom to make a profit by selling into the offer, but that incentive disappeared on Sunday.
Foreign investors were net buyers on Sunday, exchange data showed.
In Kuwait, the index edged up 0.2 percent, rising for a ninth consecutive session to its highest closing level since June 3.
Sentiment was positive after liberals and candidates from some of the country's more marginalised tribes won seats in Saturday's parliamentary elections. Many Islamists and populists boycotted the polls, so investors are optimistic that the new parliament will adopt a cooperative approach to the cabinet, permitting progress on long-delayed economic development plans.
In Dubai, builder Arabtec dropped 3.1 percent to 2.18 dirhams per share after the firm issued 1.56 billion new shares well below its market price.
The new shares, which started trading on Sunday, were issued at 1.50 dirhams each. The firm said in early July that its 2.4 billion dirham ($653 million) rights issue was nearly 30 percent oversubscribed.
Dubai's index slipped 0.5 percent, down for a second session in the last three from Tuesday's near five-year peak. Abu Dhabi's benchmark declined 0.6 percent, easing off a 57-month high.
"The market will go into a sideways trend now that most earnings are out," said Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services. "Investors will wait for the next catalyst, which could be in November - the result of Dubai's Expo 2020 bid."
Elsewhere, Qatar's index shed 0.4 percent, also coming off a 58-month high as investors booked profits.
* The index slipped 0.5 percent to 2,507 points.
* The index retreated 0.6 percent to 3,885 points.
* The index declined 0.4 percent to 9,655 points.
* The index slipped 0.7 percent to 5,317 points.
* The index eased 0.09 percent to 7,763 points.
* The index gained 0.2 percent to 8,111 points.
* The index climbed 0.1 percent to 6,714 points.
* The index declined 0.4 percent to 1,184 points.