MIDEAST STOCKS-Most Gulf bourses track global shares lower on valuation fears

By Ateeq Shariff

Nov 5 (Reuters) - Most Gulf stock markets closed lower on Wednesday, in line with global shares 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.

Saudi Arabia's benchmark index .TASI declined 1.2%, falling for a fifth consecutive session, hit by a 0.6% fall in Al Rajhi Bank 1120.SE and a 2% tumble in Alinma Bank 1150.SE, as the lender traded ex-dividend.

Elsewhere, utility firm Saudi Electricity Co 5110.SE plunged 8% - its biggest intraday fall since March 2022 - 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."

However, Savola Group 2050.SE advanced 3.7%, after the kingdom's largest food products company posted a 113% rise in third-quarter profit.

Perfect Presentation For Commercial Services (2P) 7204.SE jumped 6.2% to be the top gainer on the index after its shareholders greenlit a 10% capital hike, increasing the firm's capital to 330 million riyals ($87.99 million).

In Abu Dhabi, the index .FTFADGI dropped 0.4%, with ADNOC Drilling ADNOCDRILL.AD losing 1.3%, as the firm traded ex-dividend.

Meanwhile, ADNOC Drilling 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%.

Outside the Gulf, Egypt's blue-chip index .EGX30 edged 0.2% higher, hitting an all-time high, led by a 5.7% leap in Talaat Moustafa Group TMGH.CA, rising for a fourth consecutive session.

On Monday, the firm's unit launched the development of a new integrated tourism project with an anticipated investment of $788 million.

The Egyptian market remains on a solid and healthy trajectory, backed by favorable corporate and macroeconomic developments and a generally better outlook, said Milad Azar Market analyst at XTB MENA.

($1 = 3.7504 riyals)