DUBAI: Saudi Arabia's stocks opened lower on Tuesday, dropping for the fourth straight session, as the index continued to lose momentum after gaining sharply ahead of FTSE Russell's decision last week to upgrade the bourse to emerging market status.
Other Gulf markets were trading in a narrow range in the absence of fresh cues ahead of quarterly earning announcements for companies, which began this week. The positive news about Saudi Arabia's inclusion in the secondary FTSE emerging market index from next March was mostly priced in, prompting investors to book profits.
The Saudi index was down 0.2 percent in late morning trade, dragged down by petrochemicals and financials. Yanbu National Petrochemicals dropped 1.3 percent while Banque Saudi Fransi was down 0.6 percent.
Jarir Marketing dropped 0.9 percent after CI Capital cut the stock's rating to neutral on valuation concerns.
"In Saudi Arabia, first-quarter results will be a reality check on how the new reforms such as VAT (value-added tax), the increase in utility costs and expat levies are impacting consumer behaviour and corporate bottom lines," said Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai.
He expects the Saudi market to remain largely steady in the near term, underpinned by the upcoming announcement in June by global index compiler MSCI on whether it will upgrade Saudi Arabia to emerging market status.
The Saudi index is still up 7.5 percent so far this year despite its recent pull-back.
Other Gulf markets were flat to lower with the Qatari index dropping 0.8 percent, hurt by weakness in blue chips following gains on recent days on the back of moves by top companies to increase foreign ownership ceilings.
Industries Qatar was down 0.8 percent and Qatar National Bank fell 0.5 percent.
The Dubai index was flat but Emaar Properties remained weak amid concern about the sluggish outlook for the local real estate market. Emaar was down 0.5 percent.
Abu Dhabi's index was down 0.2 percent. Waha Capital fell 5.5 percent after going ex-dividend.
In Kuwait, the market has been soft since authorities divided it into three on Sunday as part of reforms designed to boost liquidity and attract more foreign money: the premier market, the main market and the auction market.
The index for the premier market, home to the largest and most liquid companies, fell for the third straight session and was down 0.3 percent.
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