DUBAI - Gulf stocks opened in negative territory on Monday, mirroring a slide in Asian shares after China’s decision to cancel talks with the United States increased concerns about a protracted trade war.

The Kuwaiti main indexslipped 0.3 percent in early trade, reversing some of its recent gains ahead of joining of the FTSE Russell emerging market index this week, a development expected to draw investment from passive funds.

Entry to the emerging market index will be in two phases, on Monday and on Dec. 24. Arqaam Capital estimates the inflows in across the two phases will reach $1 billion.

In Dubai, where the index shed 0.2 percent in the first hour of trading, shares in contractor Drake and Scull International (DSI) were dragging down the index.

DSI was down 2 percent and was among the stocks registering the highest trading volume.

Shares in the company plunged over the past two weeks after it said its shareholders would meet on Sept. 27 to decide whether to dissolve it, under an article of United Arab Emirates company law requiring firms to vote on whether they should continue operating if their accumulated losses have reached half of issued share capital.

Tabarak Investment, DSI's biggest shareholder with 13.73 percent, told Reuters in a statement last week that it was committed to restoring DSI to financial health, and had arranged for the company to obtain over 1 billion dirhams of projects.

The statement, however, failed to lift sentiment. 

The Abu Dhabi index was down 0.3 percent. Aldar Properties was down 0.5 percent, dragging down the index. Aldar Investment Properties, a fully-owned subsidiary of the Abu Dhabi real estate giant, started marketing on Monday a U.S. dollar sukuk.

The Saudi exchange was closed for a national holiday.

(Reporting by Davide Barbuscia; Editing by Toby Chopra) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))