The Saudi Arabian stock market fell for a third straight session on Sunday as banks extended losses while other major Gulf markets were mixed.
Investment bank EFG Hermes had said on Wednesday that the investment case for Saudi banks is no longer "compelling" against a backdrop of receding passive fund flows and the emergence of credit quality concerns among others.
All Saudi banks closed lower in the two sessions after that assessment, dragging the index close to an eight-month low.
The Saudi index dropped a further 0.6% on Sunday, with Al Rajhi Bank and National Commercial Bank was down 1.3% and 1.1% respectively.
Middle East funds plan to reduce investment in Saudi Arabia, a Reuters poll showed last week, highlighting bearish sentiment that has ia, displaying bearishness that has carried over from last month.
As a result Saudi's index has lost nearly 9% since the start of August.
The market's 2019 gains were as high as 20% in May, outperforming most regional markets ahead of the inclusion of Saudi stocks in the MSCI attracted billions of dollars from foreign investors, who have been net buyers every month this year.
On Wednesday, a second batch of Saudi shares was added to the MSCI emerging markets index, though the event failed to provide upward momentum for Saudi stocks as receding fund inflows kept investors at bay.
The Abu Dhabi index dropped 0.7%, with Emirates Telecommunications down 1.3% and First Abu Dhabi Bank losing 0.8%.
Qatar's index firmed by 0.3%, with Qatar Islamic Bank climbing 3.5% and Industries Qatar up 1.1%, the the market's gains were partially capped by a 2.9% retreat for Commercial Bank.
The Dubai index also added 0.3%, helped by its property stocks. Emaar Properties rose 1.6% and its Emaar Development unit was up 1.2%.
(Reporting by Ateeq Shariff in Bengaluru Editing by David Goodman) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))