JEDDAH/DUBAI: Stocks in the United Arab Emirates tumbled on continued worries about Dubai's debts on Wednesday and most other regional bourses fell as muted bank earnings and overnight declines on global markets spurred selling.

The Dubai and Abu Dhabi indexes made their largest one-day declines for three weeks, falling 2.7 and 1.6 percent respectively, as property-related stocks slumped. The Dubai index closed at 1,712 points and Abu Dhabi at 2,714 points.

"After kick-starting the year pretty optimistically, Dubai World's restructuring is weighing on the (UAE) market," said Ali Khan, managing director and head of brokerage at Arqaam Capital.

Government-owned Dubai World stunned global markets in late November by asking for a standstill as it tries to restructure billions of dollars of debts.

Emaar Properties and Aldar Properties fell more than 5 percent to slump to four-week lows.

"Dubai's debts will remain an overhang for the rest of the Gulf," said a Kuwait trader who asked not to be identified. "Foreign investors are exiting the UAE and looking to get into Qatar and that will be a theme over the next few months."

Egypt's Orascom Telecom surged intraday after saying it would start an $800 million rights on Jan. 31, but it subsequently gave back most of these gains as an Egyptian court backed an appeal to block France Telecom's offer to buy outstanding Mobinil shares.

Orascom, which made the appeal, owns about 34.6 percent of Mobinil and France Telecom 36.4 percent. If the stake sale goes through, Orascom will lose its presence in its home market, but book a one-off revenue gain. Orascom ended 0.3 percent higher after being up 5.7 percent intraday. Mobinil fell 3.7 percent.

"Basically it is negative for (the share price of) Mobinil in the short term," said CI Capital telecoms analyst Amr Elalfy.

Kuwait's index fell for a third day, with volumes declining by more than half from the day before. The benchmark fell 0.6 percent to 6,983 points.

"Most investors are waiting for banks to announce their results - Saudi banks' performance has got everybody worried," said a Kuwait-based trader who asked not to be identified.

"We're not correlated to the Saudi market, but if Saudi banks are doing badly then Kuwait's are likely to as well. There's a lot of money in the open market that's looking to exit and then re-enter at lower prices."

Saudi bank profits have broadly missed forecasts, although above-estimate earnings from Riyad Bank, the Kingdom's third largest lender, may boost sentiment.

"Bank numbers weren't just disappointing in terms of provisions but on an operating level as well," said a Riyadh-based analyst who asked not be identified, speaking before the after-market hours announcement from Riyad Bank. "I would not be in banks for the next couple of months."

Saudi Basic Industries Corp. (SABIC) hit a 14-month closing high, rising 1.4 percent as investors bet its earnings will beat estimates, but late selling led the index to its fourth straight loss.

"It seems expectations are pretty high for petrochemicals' earnings and people don't want to sell going into these numbers," said the Riyadh analyst.

The Tadawul All-Share Index (TASI) fell 0.1 percent to 6,263 points. Sector activity was mixed with 8 out of 15 sectors gaining, the gains however ranged from 0.07 percent by the Banks and Financial Services Sector to 2.48 percent by the Transport sector. The losses ranged from 0.06 percent by the Building and Construction sector to 1.01 percent by the Insurance Sector. The overall market breadth remained negative with only 36 advancers against 83 decliners giving an AD ratio of 0.4337, the Jeddah-based Financial Transaction House (FTH) said in its daily market commentary.

Qatar National Bank fell 1.3 percent, despite reporting a 65 percent rise in quarterly profit. The Qatari index dropped 1.1 percent to 6,833 points.

- With input from agencies