Saudi Arabia's stock market dropped on Monday as banks and petrochemical shares weighed on the index against a backdrop of political tensions in the region, while Dubai and Abu Dhabi bourses rose sharply on gains in their blue-chip stocks.

Saudi's main index fell 0.6%. The kingdom's largest petrochemical maker Saudi Basic Industries shed 1.8% and its biggest lender National Commercial Bank was down 0.7%.

Weakness in worldwide demand for oil shifted sentiment in the oil market in recent days, with hedge funds, producers and traders all taking a more bearish tack.

Saudi Kayan Petrochemical 2350.SE fell 1.4% after it swung to a second-quarter loss, which it blamed on lower product prices and higher financing costs, while Saudi Arabia Fertilizers dropped 1.9% after its profit for the same period was hurt by a production halt at one of its plants during maintenance.

Dubai's main index .FMGI was up 1.3%. Blue-chip developer Emaar Properties climbed 2.5% after it struck a deal with Beijing Daxing International Airport for joint execution of an $11 billion project, that includes residential and leisure facilities.

Emaar units Emaar Development and Emaar Malls followed suit rising 2.8% and 2.6%, respectively.

Dubai Financial Market edged up 0.7% after its second-quarter profit attributable to shareholders rose more than 9%.

The Abu Dhabi index gained 1.2%, rising for a fifth day running, boosted by First Abu Dhabi Bank which closed 1.5% higher after reporting a 5% rise in second-quarter net profit

Aldar Properties rose 2.6%. After the market closed, the firm provided a progress update on recently awarded 5 billion dirhams ($1.36 billion) worth of projects. It also raised its annual profit guidance by 50% for the next three to four years. 

Egypt's blue-chip index also closed 0.8% higher with market heavyweight lender Commercial International Bank gaining 1.2%.

Qatar's index recouped earlier losses to end 0.4% higher underpinned by its financial and industrial stocks. The Gulf's largest lender Qatar National Bank closed 1.5% up and Industries Qatar rose 1%.

($1 = 3.6728 UAE dirham) 

(Reporting by Shakeel Ahmad and Maqsood Alam in Bengaluru; editing by Emelia Sithole-Matarise) ((;))