MIDEAST STOCKS-Major Gulf bourses track Asian shares lower on valuation fears

Nov 5 (Reuters) - Major stock markets in the Gulf fell in early trade on Wednesday, tracking Asian shares lower after an overnight tech-led sell-off on Wall Street put the spotlight on stretched valuations.

Stocks are retreating from record highs on fears equity markets may have become overstretched after the CEOs of Wall Street heavyweights Morgan Stanley MS.N and Goldman Sachs GS.N questioned whether sky-high valuations can be sustained.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell as much as 2.3%, the most since early April, and last traded 1% lower. MKTS/GLOB

Saudi Arabia's benchmark index .TASI dropped 0.8% and was on course for a fifth consecutive session of losses, hit by a 1.3% fall in Saudi National Bank 1180.SE and a 1% decline in oil behemoth Saudi Aramco 2222.SE.

Among other losers, utility firm Saudi Electricity Co 5110.SE plunged 4.6% following a decline in quarterly net profit.

The headwinds from Wall Street's elevated valuations may spill over into the Saudi market.

Despite Aramco’s solid earnings and oil prices holding around the mid $60s per barrel, the latest global equity sell-off has exposed a latent sensitivity to high valuation levels that have gone untested for some time, said Ahmad Assiri, research strategist at Pepperstone.

"This recent downswing, the steepest since early October, could translate into mild selling pressure on (Saudi stocks) .TASI due to the overall correlation between global equity markets."

Crude prices dipped amid a wider slump in financial markets and a strong U.S. dollar, while investors assessed the supply outlook.

In Abu Dhabi, the index .FTFADGI eased 0.2%, with ADNOC Drilling ADNOCDRILL.AD losing 0.5%.

The drilling unit of Abu Dhabi's state oil giant has signed a definitive deal to acquire an 80% stake in MB Petroleum Services for an enterprise value of $204 million.

Dubai's main share index .DFMGI fell 0.3%, pressured by a 1.1% drop in blue-chip developer Emaar Properties EMAR.DU.

The Qatari index .QSI lost 0.4%, with Qatar Islamic Bank QISB.QA falling 1.1%.