Stock markets in the United Arab Emirates fell early on Sunday, with Dubai hardest hit by losses in property shares, while the Saudi index was on track to extend losses for a third session.

Dubai's main share index retreated 1.6%, as most of the stocks in the index were in negative territory including blue-chip developer Emaar Properties, which fell 2.6%.

The six-member Gulf Cooperation Council faces a steep economic contraction this year before partially rebounding in 2021, with most countries facing sharper drops than previously estimated, a quarterly Reuters poll showed. 

The United Arab Emirates, which has seen a surge in new COVID-19 cases, is expected to see GDP decline 6.0% this year, grow 2.7% next year and expand 3.8% in 2022. In July, analysts expected a 5.1% decline in 2020 and 2.6% growth in 2021.

Saudi Arabia's benchmark index declined 0.7%, dragged down by a 1.2% fall in Al Rajhi Bank and a 3% drop in Dr Sulaiman Al-Habib Medical Services.

Brent crude dropped 19 cents to settle at $37.46 a barrel on Friday, after touching a five-month low of $36.64 in the previous session, as rising COVID-19 cases in Europe and the United States heightened concerns over the outlook for fuel consumption. 

Amongst others, sharia-compliant lender Dubai Islamic Bank decreased 1.4%.

The Abu Dhabi, index lost 0.6%, with Aldar Properties sliding 4% and the country's largest lender First Abu Dhabi Bank down 0.7%.

(Reporting by Ateeq Shariff in Bengaluru; editing by David Evans) ((AteeqUr.Shariff@thomsonreuters.com; +918061822788;))