Gulf stock markets pulled back with oil prices on Wednesday while a negative sales forecast by a major Saudi retailing chain hurt the bourse in that country. A couple of blue chips favoured by foreign investors boosted Egypt's market.

The Saudi index dropped 0.9 per cent in heavy trade as Jarir Marketing sank 9.1 per cent after warning late on Tuesday that its sales would plunge by as much as 30 per cent year-on-year in the first quarter of 2016.

The projected drop is partly because sales were unusually high in the first quarter of 2015, hitting 1.9 billion riyals ($507 million) as King Salman granted a bonus of two months' salary to state employees to mark his accession to the throne.

But it is also due to state austerity measures in response to low oil prices, which caused the government to run a budget deficit of nearly $100 billion last year. The measures have cut the disposable incomes of many Saudis.

Durable goods retailer United Electronics (eXtra) fell 2.5 per cent, clothing retailer Abdulaziz Alhokair Co lost 2.8 per cent and jeweller Ahmed Fitaihi Co slid 1.3 per cent on Wednesday.

But Saudi Basic Industries outperformed, closing only 0.3 per cent lower after trading higher for most of the day in response to news that it raised domestic prices for some categories of steel, after a long downtrend.

Some second- and third-tier shares favoured by local speculators surged, with property developer Alandalus jumping 3.3 per cent.

Dubai's index edged down 0.2 per cent but closed well off its low, with trade thinned as a heavy rainstorm in the UAE deterred individual investors from visiting the exchange. Union Properties, which has been extremely active and volatile in the last few days, fell 2.1 per cent.

Trade on Abu Dhabi's exchange was halted, and all trades that had already taken place on the day were cancelled, after the rainstorm caused a power outage and disrupted communication lines for some brokerages.

Qatar dropped 0.4 per cent, also ending well off its low, as drilling rig provider Gulf International Services , the most heavily traded stock, pulled back 0.7 per cent. United Development plunged 7.5 per cent as it went ex-dividend.

Egypt's index rose 0.5 per cent in its heaviest volume since mid-January as Global Telecom surged 4.6 per cent and investment bank EFG Hermes added 3.5 per cent.

The other eight of the 10 most heavily traded stocks barely moved, however. The central bank on Tuesday removed limits on how much individuals can withdraw or deposit in foreign currencies at banks, a move intended to increase liquidity in a market that has been starved of dollars. But it is still not clear how authorities intend to resolve Egypt's long-term foreign exchange shortage and the overvaluation of the Egyptian pound.

Beltone Financial, which had more than quadrupled in recent weeks on its acquisition of CI Capital, plunged again on profit-taking, dropping by its 10 per cent daily limit.-Reuters