DUBAI: Most stock markets in the Gulf ended lower on Thursday, with the Saudi index underperforming, dragged down by losses in its financial shares.

Saudi Arabia’s benchmark index dropped 1.1%, with Al Rajhi Bank and petrochemical firm Saudi Basic Industries both sliding 3%.

On Wednesday, the Saudi index registered sharp gains after Crown Prince Mohammed bin Salman said the kingdom had no plans to introduce income tax and a decision last July to triple value-added tax (VAT) to 15% was temporary.

The country tripled VAT to offset the impact of lower oil revenue on state finances in a move that shocked citizens and businesses expecting more support from the government during the COVID-19 pandemic.

In Dubai, the main share index lost 0.6%, hit by a 0.8% fall in blue-chip developer Emaar Properties and a 2.3% slide in Aramex as the logistics firm went ex-dividend.

In Abu Dhabi, the index fell 0.6%, pressured by a 1% fall in First Abu Dhabi Bank, the country’s largest lender, while telecoms giant Etisalat was down 0.6%.

“Strong corporate earnings from companies in the first quarter have helped drive gains in the past few days. However, with some analysts pointing to revenues falling short of pre-pandemic levels, there are concerns that the companies left to report their results might also not perform so optimally,” said Michael Stark, research analyst at Exness.

“Investors now appear to be cashing out with the market on a high. Extended sell-offs could lead to an erosion of the gains made over the past few days.”

In Qatar, the benchmark index eased 0.3%, with petrochemical maker Industrie Qatar losing 0.9%.

Elsewhere, telecoms firm Ooredoo, which retreated about 2% in early trade following a decline in first-quarter earnings, ended flat.

Egypt’s bourse was closed for a public holiday.