DUBAI, Aug 29 (Reuters) - Qatar's stock market dropped on Tuesday after Fitch cut the country's credit rating, while most other Gulf bourses fell in thin trade but Egypt's blue-chip index gained strongly, helped by investment firm Qalaa Holdings.
Fitch lowered Qatar by one notch to AA-minus with a negative outlook on Monday, citing the impact of sanctions imposed by other Arab states on Doha. That brought Fitch into line with the other two major rating agencies, Moody's and Standard & Poor's.
The downgrade threatens higher funding costs for Qatari banks as they seek to replace deposits and loans that are being withdrawn by the other Arab states. Most bank shares fell on Tuesday as Qatar National Bank
QNBK.QA
lost 1.3 percent.
The Qatari index
.QSI
slipped 0.9 percent to its lowest close since early July. Among other active stocks, Qatar Gas Transport (Nakilat)
QGTS.QA
dropped 2.8 percent.
Turnover was thin in other Gulf markets as many investors stayed away with the approach of Eid al-Adha holidays beginning this week; the holidays start in Saudi Arabia on Wednesday and in the United Arab Emirates on Thursday.
In Dubai, the index
.DFMGI
edged down 0.1 percent with daily trading volume hitting its lowest level since September 2015 for a second straight day. GFH Financial
GFH.DU
, the most active stock, gained 1.7 percent.
Dana Gas
DANA.AD
retreated 1.5 percent in Abu Dhabi, helping pull the index there
.ADI
down 0.5 percent.
Saudi Arabia's index
.TASI
edged down 0.04 percent as industrial pipe maker Amiantit
2160.SE
jumped 6.5 percent in unusually heavy trade after saying it expected a capital gain of 50-60 million riyals ($13.3-16.0 million) and positive cash flow of between 2 and 4 million riyals in the third quarter due to the merger of its European entities.
Development Works Food
9501.SE
surged 4.9 percent after reporting second-quarter net profit rose by almost two-thirds from a year earlier as revenues more than doubled.
In Egypt, the blue-chip index
.EGX30
climbed 1.4 percent as Qalaa
CCAP.CA
, which had jumped 8.9 percent on Monday after one of its units sold its stake in an Ethiopian company in a deal worth $14.5 million, added a further 3.4 percent; it was the most active stock. Commercial International Bank
COMI.CA
, the biggest lender, rose 1.6 percent.
Investment bank EFG Hermes
HRHO.CA
gained 2.3 percent and GB Auto
AUTO.CA
surged 8.1 percent in its heaviest trade for a month. The broad EGX100 index
.EGX100
fell 0.3 percent, however.
HIGHLIGHTS
SAUDI ARABIA
* The index
.TASI
edged down 0.04 percent to 7,259 points.
DUBAI
* The index
.DFMGI
edged down 0.1 percent to 3,611 points.
ABU DHABI
* The index
.ADI
dropped 0.5 percent to 4,464 points.
QATAR
* The index
.QSI
lost 0.9 percent to 8,859 points.
EGYPT
* The index
.EGX30
rose 1.4 percent to 13,194 points.
KUWAIT
* The index
.KWSE
edged down 0.1 percent to 6,899 points.
BAHRAIN
* The index
.BAX
edged down 0.1 percent to 1,299 points.
OMAN
* The index
.MSI
gained 0.9 percent to 5,047 points.
(Reporting by Andrew Torchia; Editing by Dale Hudson) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))
