Saudi Arabia's stock market fell sharply on Wednesday after oil prices sank and the government released its 2019 budget, while Dubai rebounded on the back of a rise in bank shares.

Brent oil fell below $56 a barrel to its lowest level in more than a year, pushing the Saudi stock index down 1.1 percent in its biggest one-day drop since late November.

Petrochemical shares fell, with Saudi Basic Industries dropping 2.4 percent, and Al Rajhi Bank shedding 1.4 percent.

The state budget promised a 7 percent spending rise next year in an effort to spur sluggish economic growth, but that figure had already been flagged in a pre-budget announcement.

Saudi officials said they had no intention of changing plans to raise fees for expatriate workers this year, and indicated that domestic fuel price hikes might occur under a long-term subsidy reform policy. Hikes in both areas could hurt companies, who have lobbied for the expat fee rises to be delayed.

In Dubai, the index rose 1.3 percent after falling 2.1 percent in the last session. The index is the worst-performing in the Middle East and North Africa this year, down about 25 percent and near its lowest levels since 2013.

While valuations are attractive, there was no rush for investors to build positions, Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai, said. However, some flows may be going into high-yielding stocks before annual dividends are announced early next year, he added.

Dubai's largest lender Emirates NBD, which jumped 5.3 percent, offers an 8.53 percent dividend yield for next 12 months, according to Refinitiv data.

Dubai Investments, another high-yielding stock, climbed 1.6 percent, while DAMAC Properties increased 4.2 percent after hitting a multi-year low in the last session.

Egypt's blue-chip index edged down 0.3 percent with tobacco firm Eastern Co falling 4.0 percent; in response to a workers' strike on Tuesday, it said that it accepted some demands while it was still working on others. The firm said its plants were operating with full capacity.

Qatar's index was almost flat with Qatar Islamic Bank increasing 1.3 percent, while recently listed Qatar Aluminum Manufacturing Co soared 10 percent after FTSE Russell decided to include the firm in its Indexes from Dec. 24.

The Abu Dhabi index added 0.6 percent with First Abu Dhabi Bank, the United Arab Emirates' biggest lender, climbing 1.3 percent. Abu Dhabi National Energy Co, which had slumped 9.1 percent in the last session, rebounded 4.4 percent in low volume.

In Oman, the index lost 1.0 percent, its biggest one-day drop since September, after ratings agency Fitch downgraded the country's credit rating to "junk", citing fiscal challenges to the oil producer from volatile crude prices. 

Banks, which could face higher overseas funding costs as a result, were hit with Bank Muscat shedding 1.9 percent and Bank Sohar slipping 2.6 percent. SAUDI ARABIA * The index  fell 1.1 percent to 7860 points DUBAI * The index  rose 1.3 percent to 2,544 points ABU DHABI * The index rose 0.6 percent to 4,860 points EGYPT * The index  fell 0.3 percent to 13,078 points QATAR * The Index was flat at 10,496 points KUWAIT * The index edged up 0.2 percent to 5,368 points

BAHRAIN * The index was flat at 1,315 points OMAN * The index was down 1.0 percent at 4,337 points

(Editing by Andrew Torchia and Alexander Smith) ((shakeel.ahmad.thomsonreuters.com@reuters.net;))