Saudi Arabian stocks fell on Tuesday, pulled down by financial shares before the market's inclusion in the FTSE Russell's emerging-market index. All major gulf markets slid.
Middle Eastern markets followed global cues, with oil prices dropping after China cut its 2019 economic growth target, dimming the outlook for fuel demand.
The Saudi index edged down 0.1 percent with AXA Cooperative Insurance declining 1.3 percent and Al Rajhi Co for Cooperative Insurance sliding 1.6 percent.
Tadawul, Saudi Arabia's main stock exchange and the Middle East's largest, will join the FTSE Russell and MSCI emerging- market indices in March and May this year.
The Saudi stock exchange expects passive fund inflows of between $15 billion and $20 billion this year as it gears up for inclusion in emerging market benchmarks, its chief executive told Reuters.
Arqaam Capital said it still expects $20 billion of passive inflows just from joining MSCI and FTSE EM in 2019. Additional active inflows should take the total to $40-$60 billion.
But Al Yamamah Steel Industries 1304.SE surged 9.9 percent to a five-month high after it signed a $106.7 million contract to supply solar steel structure to the Dubai Solar Park Project.
The Dubai index was down 0.2 percent with Emaar Properties sliding 0.4 percent and its unit Emaar Development shedding 1.3 percent.
Dubai property prices have been slipping from their mid-2014 peak and were partly behind the index's worst performance in local currency terms compared with other major global markets last year.
Although Dubai stocks have rallied this year, led by strong fourth-quarter results at real estate companies, an expected further fall in property prices is capping gains.
Nasdaq-Dubai listed DP World slipped 2.1 percent. The port operator has asked an Indian court to halt an investigation into alleged antitrust violations at the country's largest container port, in Mumbai, saying the regulator was seeking excessive information, Reuters reported.
Abu Dhabi's index lost 0.1 percent with the country's biggest lender, First Abu Dhabi Bank, falling 0.5 percent.
The Qatar index was also down 0.1 percent as Vodafone Qatar slid 3.1 percent. Its shareholders approved a reduction in the nominal value of shares to 1 riyal ($0.2747) each through a share split.
($1 = 3.6405 Qatar riyals)
(Reporting by Ateeq Shariff in Bengaluru, editing by Larry King) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))