* Saudi's state-linked funds prop market
* Bluechips SABIC and Al Rajhi close higher
* Selling by foreign investors is "slowing" - trader
* Dubai's Mashreqbank jumps on results
By Muvija M and Abinaya Vijayaraghavan
Oct 22 (Reuters) - Saudi Arabia's stock index recovered most of its earlier losses on Monday, with government-linked funds continuing to bolster the market as concerns about the killing of Saudi journalist Jamal Khashoggi weighed.
The main index recovered to trade down only 0.2 percent after falling as much as 3.3 percent, similar to the previous session where it closed in positive territory despite an early sell-off.
State-linked Saudi funds have been buying blue-chips in a support operation since the market plunged last week, according to analysts.
Saudi Arabia on Sunday described the killing of Khashoggi at its Istanbul consulate a "huge and grave mistake," but said its crown prince Mohammed bin Salman had not been aware.
Saudi's stock market has lost more than 4 percent in value since Oct. 2 because of concerns the Khashoggi case could trigger U.S. sanctions and shrink inflows of foreign investment.
Fresh stock exchange data released on Sunday showed foreigners sold a net 4.01 billion riyals ($1.07 billion) in Saudi stocks in the week ending Oct. 18 - one of the biggest selloffs since the market opened to direct foreign buying in mid-2015.
Selling by foreign investors is slowing, though the sentiment in the market is weak, a trader told Reuters.
Top petrochemical producer Saudi Basic Industries Corp reversed losses to gain 1.6 percent, while Al Rajhi Banking & Investment Corp also ended 1.1 percent higher.
Qatar's stock index rose 1.2 percent aided by its banks. Qatar National Bank gained 1.6 percent and Qatar Islamic Bank recorded a 1.7 percent increase.
Qatar Islamic Insurance rose 0.5 percent after reporting a double-digit jump in nine-month profit on Sunday.
But cement maker Qatari Investors Group shed 2.2 percent after it reported a 9.3 percent drop in net profit for the same period.
Qatar Petroleum's Qatar Aluminum plans to sell 49 percent of its shares in a public offering on Oct. 30, state news agency QNA reported on Monday.
Egypt's blue-chip index added 0.9 percent, led by a 6 percent jump in El Sewedy Electric after receiving initial approval to start negotiations relating to a hydropower project in Tanzania.
Eastern Co gained 1.1 percent after the Egyptian government said last week it would postpone a planned offering of 4.5 percent of the company.
In Dubai, the index closed up 0.4 percent with developer Emaar Properties rising 1.2 percent and Emirates NBD adding 1.1 percent.
Dubai's Mashreqbank jumped 2.9 percent after reporting a 4.6 percent rise in quarterly net profit to 587 million dirhams on Monday.
Abu Dhabi's bluechip index saw a 0.3 percent gain, aided by a 5.6 percent jump in Agthia Group and a 0.4 percent rise in bluechip First Abu Dhabi Bank.
But Abu Dhabi Commercial Bank lost 1.3 percent despite reporting a 5.5 percent rise in quarterly profit on Sunday, in line with analyst forecasts.
SAUDI ARABIA * The index lost 0.2 percent to 7649 points. DUBAI * The index gained 0.4 percent to 2,747 points. ABU DHABI * The index added 0.3 percent to 4,956 points. QATAR * The index rose 1.2 percent to 10,274 points. KUWAIT * The index lost 0.4 percent to 5,147 points. BAHRAIN * The index up 0.04 percent to 1,323 points. OMAN * The index rose 0.04 percent to 4,455 points. EGYPT * The index gained 0.9 percent to 13,646 points. (Additional reporting by Saeed Azhar Editing by Robin Pomeroy)