Saudi Arabia's stock index fell sharply on Tuesday with all its banking shares declining ahead of third-quarter results as expectations remain muted, while most major Gulf markets traded in negative territory.
In Saudi Arabia, the benchmark index declined 1.6%, reaching its lowest since November 2018. Riyad Bank lost 4% and National Commercial Bank (NCB) dropped 1.6%.
Third-quarter results at Saudi banks are expected to be hit by two consecutive rate cuts by the Saudi central bank in August and September, which analysts say will squeeze their revenue.
"In general, expectations from third quarter results are muted. Rate cuts are spread negative since a large chunk of their deposits are cost-free anyways & loan growth is not exciting," said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital.
National Gas And Industrialization (GASCO) fell 4.6% as it traded ex-dividend, meaning any new buyers of the stock are not entitled to the next dividend payment.
With Tuesday's fall, the kingdom's main index has fallen in ten of eleven sessions this month, leaving it 4.2% down year to date, with over 8% losses coming in third-quarter.
The index was up more than 20% in the first four months of 2019 in the run up to joining the MSCI and FTSE emerging-market indexes, which helped attract billions of dollars from passive funds.
However, escalating trade tensions between the United States and China, growing geopolitical risks in the region and volatile oil prices have hit the market since then and kept active emerging market funds from investing in the kingdom.
Egypt's blue-chip index was down 0.9%, with 23 of 30 stocks on the index seeing a decline. Egypt Kuwait Holding EKHO.CA dropped 2.4% and Eastern Company was down 1.2%.
Exchange data showed non-Arab foreign investors were net sellers of the stocks.
Back in the Gulf, Dubai's main share index slid 0.5%, extending losses from the previous sessions in a downturn led by real estate stocks.
Blue chip developer Emaar Properties dropped 1.1% and Union Properties plunged 7.2%.
In Qatar, the index rose 0.3%, extending its gains for a consecutive fourth session, with lender Masraf Al Rayan increasing 2.4%.
In Abu Dhabi, the index was down 0.1%, led by a 0.8% fall in Abu Dhabi Commercial Bank and a 0.1% drop in First Abu Dhabi Bank.
(Reporting by Shamsuddin Mohd in Bengaluru, editing by Deepa Babington) ((firstname.lastname@example.org; +918067497252;))