Most Gulf Arab stock markets fell on Sunday as plunging world oil prices worsened already negative sentiment.

Dubai's bourse fell the most, tumbling 5.58 percent, with Emaar Properties losing 9.93 percent. 'Oil prices have dropped severely and that has exacerbated negative sentiment across the GCC,' said Rami Sidani, head of Mena Investments at Schroders Investment Management.

Oil prices fell below $34 a barrel in New York on Friday, their lowest level in more than four years. Kuwait's market fell to levels last seen in June 2005, with Global Investment House falling 8.2 percent.

Global, which was downgraded by two ratings agencies last week for allegedly failing to meet debt obligations, was expected to meet with foreign lenders to renegotiate the terms of its debt.

'Today we have a concentration of investment companies struggling to meet their obligations and accordingly the market will continue to suffer due to shortage of liquidity among these investment companies and the exposure of the domestic banking sector to these firms,' Sidani said.

Saudi Arabia and Qatar bucked the trend, ending higher. 'Doha seems like it has its own trend now,' said Samer al-Jaouni, general manager of Middle East Financial Brokerage Company.

'It has been supported by strong cash dividends that companies have announced, especially in the banking sector.'   Saudi Arabia rose as investors expected positive 2009 budget figures to be released soon.

The worst-performing index in the Gulf Arab region this year, Dubai closed 5.58 percent lower at 1,802 points. Emaar  fell 9.93 percent and Dubai Islamic Bank dropped 9.83 percent.

The Abu Dhabi benchmark which has fallen more than 41 percent so far this year, declined 3.72 percent to 2,576 points.

Etisalat lost 4.12 percent and First Gulf Bank plunged 8.84 percent. Sorouh fell 9.51 percent. The Kuwait benchmark fell 2.66 percent to 8,394 points, declining for a fourth trading day. Zain dropped 8.77 percent and National Bank of Kuwait lost 7.14 percent.

Muscat's benchmark fell 2.29 percent to 5,942 points, after two trading days of gains. Oman Cable Industries dropped 8.75 percent and Bank Muscat 1.99 percent.

'If oil continues to go down, we'll see the market going down,' said Syed Quadry, senior research analyst at Amwal Investment.

The Qatar benchmark, down more than 30 percent this year, closed 0.34 percent higher at 6,665.06 points. Industries Qatar rose 3.52 percent and Commercial Bank of Qatar 1.87 percent.

Saudi benchmark rose 1.46 percent to 4,774 points. Samba Financial climbed 3.6 percent and Saudi Basic Industries Corporation (Sabic) 1.82 per cent.

'People are expecting a good budget for 2009. Investors are taking advantage of that,' said Abdulla al-Aqil, a trader at Samba Financial.

Bahrain's measure declined for a third consecutive trading day, falling 2.14 percent to 1,861 points.-Reuters