Major stock markets in the Gulf retreated on Wednesday, ahead of Eid holidays, as sector leaders First Abu Dhabi Bank and Etisalat dragged the Abu Dhabi bourse lower.

The index dropped 0.9%, weighed down by a 1.8% decline in First Abu Dhabi Bank after it reported a 25% fall in quarterly profit on Tuesday, pressured by another quarter of higher impairment charges.

The United Arab Emirates' biggest lender reported a net profit of 2.41 billion dirhams ($656.18 million) in the second-quarter versus 3.22 billion dirhams a year earlier.

Banks in the region have been hit by the twin shock of the COVID-19 pandemic and lower oil price, with most seeing their profits plunge in the second quarter as they book higher provisions for expected credit losses.

Elsewhere, telecoms firm Etisalat was down 0.8%.

Dubai's main share index fell 0.5%, pressured by a 2.9% decrease in Emirates Integrated Telecommunications as the stock traded ex-dividend.

The Qatari index eased 0.4%, with Commercial Bank shedding 5.2% and Qatar National Bank losing 0.5%.

The index's losses, however, were limited by gains at telecoms company Ooredoo, which was up 2%.

Ooredoo posted second-quarter net profit of 431.7 million riyals ($118.60 million), up from 420.7 million riyals year ago.

** Saudi Arabia's stock exchange was closed on Wednesday, while other exchanges are scheduled to be closed from Thursday. ($1 = 3.6728 UAE dirham) ($1 = 3.6400 Qatar riyals)

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