* Rumours that FTSE could delay upgrading Saudi market
* Gulf traders boost Qatar
* Dana Gas steepens decline as sukuk trial resumes
* Dubai falls in broad-based decline
* Tourism shares strong in Egypt
By Celine Aswad
DUBAI, Sept 25 (Reuters) - Saudi Arabia’s stock index fell on Monday on rumours that index compiler FTSE might not upgrade Riyadh to emerging-market status as quickly as hoped, while Qatar notched up its fifth straight session of gains.
At the end of the business day on Sept. 29, FTSE will announce its decision on whether to include Saudi Arabia in its secondary emerging market index.
For several weeks the market had been pricing in a strong chance of an upgrade. Analysts have predicted Saudi Arabia could see around $3.2 billion to $3.7 billion of passive fund inflows as a result, although that would not occur until the decision actually took effect, probably in late 2018.
Two fund managers told Reuters that the Saudi stock index fell 1.4 percent on Monday because investors were worried that FTSE might delay the upgrade on the grounds that foreign investors lacked enough access.
“These are rumours, which cannot be validated or verified until FTSE makes the announcement - nevertheless they were strong enough to create nervousness in the market today,” said one fund manager, who declined to be named.
Shares in major companies that would probably be included in FTSE’s emerging market index were some of the worst performers on Monday. Samba Financial Group shed 2.9 percent and dairy maker Almarai lost 3.0 percent.
In Abu Dhabi, Dana Gas sank 4.1 percent, taking its losses since Wednesday to a little more than 10 percent, as investors awaited the outcome of a London High Court trial on the validity of its $700 million of outstanding Islamic bonds .
The trial focuses on Dana’s June announcement that it would not redeem its sukuk on the grounds that changes in Islamic financial practice had made them unlawful in the United Arab Emirates. It is not clear when the London court will rule or whether a ruling will end the dispute, which is also being fought in a UAE court.
Most other Abu Dhabi shares were weak, dragging the index 0.7 percent lower. In Dubai, the index fell 0.9 percent as 20 shares declined and only nine rose.
Qatar’s index rose 0.6 percent, however, as regional investors stepped up their purchases of Qatari shares. They accounted for roughly 10 percent of total market turnover, bourse data showed.
Fund managers from the six-nation Gulf Cooperation Council, excluding Qatar, dumped Qatari equities after four Arab states cut ties with Doha in June. It was not clear whether some GCC investors were now buying because they hoped for a resolution of the dispute.
A little under two-thirds of the 20 most valuable Qatari companies rose on Monday, including Qatar Islamic Bank , which added 2.6 percent.
In Egypt, the index rose 0.5 percent with tourism-related companies some of the top gainers. They included Egypt Resorts, which surged 9.8 percent in unusually heavy trade.
* The index dropped 1.4 percent to 7,224 points.
* The index fell 0.9 percent to 3,570 points.
* The index declined 0.7 percent to 4,411 points.
* The index rose 0.6 percent to 8,449 points.
* The index rebounded 0.5 percent to 13,674 points.
* The index dropped 0.4 percent to 6,768 points.
* The index lost 0.9 percent to 1,292 points.
* The index rose 0.6 percent to 5,130 points. (Editing by Andrew Torchia, Larry King)