DUBAI, June 13 (Reuters) - Kuwait's benchmark
slumped to a 4-month low on Wednesday as ongoing political
uncertainty in the Gulf state weighed on investor sentiment,
while other regional bourses were largely muted.
The country's index dropped 1.7 percent to its lowest close
since Feb. 12, following the resignation of a second minister in
less than a month on Tuesday.
Social Affairs and Labour Minister Ahmed al-Rujaib resigned
on Tuesday, the second cabinet minister to quit in less than a
month.
Kuwait brought in its fourth government in six years after a
snap parliamentary election in February, but tensions between
the cabinet and chamber escalated quickly, hindering economic
policy-making and planning in the oil-rich Gulf state.
"There has been some panic selling today but the volumes
have been low," said Naser al-Nafisi, general manager for Al
Joman Center for Economic Consultancy in Kuwait.
"The reason is mainly political. The government's future is
not clear at this stage and there is concern about it."
It's the benchmark's third fall in four sessions this week,
trimming its 2012 gains to 1.8 percent.
Kuwait Finance House and logistics firm Agility
each dropped 1.4 percent. Burgan Bank 2.3 percent. "Despite the drop, volumes have been low and the banking sector has been relatively stable in the long run," said another Kuwait-based trader who did not wish to be identified. "A positive sentiment is needed now to drive the market." Telecoms operator Zain bucked the trend, gaining 1.5 percent following a last-minute rally. Other Gulf markets were mixed with some indices advancing on the back of rising oil prices. But concerns about contagion from Spain's banking crisis kept investors on the defensive. Brent crude gained, with investors awaiting the outcome of this week's meeting of the producer group OPEC. In Saudi Arabia, petrochemical stocks led the rally, buoyed by steady oil prices. Saudi Basic Industries Corp (SABIC) rebounded from Tuesday's six-month low, lifting Saudi's benchmark. SABIC climbed 0.8 percent. The petrochemical producer's shares have loosely tracked declines in oil prices, with crude seen as a key indicator both for petrochemical product prices and likely demand. Advanced Petrochemicals also gained 0.8 percent. "The market is recovering losses from yesterday - oil prices are steady today, which is helping," said al-Nafisi. Saudi's main index rose 0.3 percent. Al Rajhi Bank climbed 0.7 percent and Kingdom Holding added 3 percent. In Dubai, the benchmark ended higher for a third day in four this week, rising 0.6 percent. Qatar's benchmark slipped 0.2 percent to a new eight-month low, while Bahrain's index dropped 1.6 percent to its lowest level in at least two years. WEDNESDAY'S HIGHLIGHTS KUWAIT * The measure dropped 1.7 percent to 5,916 points. SAUDI ARABIA * The benchmark gained 0.3 percent to 6,745 points. DUBAI * The index gained 0.6 percent to 1,478 points. QATAR * The benchmark fell 0.2 percent to 8,261 points. BAHRAIN * The measure slipped 1.6 percent to 1,117 points. EGYPT * The benchmark fell 0.6 percent to 4,421 points. ABU DHABI * The index added 0.03 percent to 2,448 points. OMAN * The index eased 0.06 percent to 5,711 points. (Editing by David French)