* Saudi petchem sector holds up amid oil plunge
* Many investors anticipating oil price rebound in New Year
* Expectations for passive fund inflows support Saudi
* Dubai's GFH Financial rebounds after statement on shares
* Egypt's Sidi Kerir Petrochemicals ends five days of losses
By Shakeel Ahmad and Ateeq Shariff
Dec 26 (Reuters) - Gulf stock markets largely moved sideways on Wednesday despite Brent oil's decline below $50 a barrel for the first time since July 2017, while Egypt's blue-chip index rose sharply, led by rebounding bank shares.
Oil's 15 percent tumble this month, if sustained, threatens major damage to the state finances of most Gulf countries, which could reduce governments' ability to spend and could revive investor concerns about their financial stability.
But Gulf stock markets have held up relatively well in the last several weeks, outperforming MSCI's emerging market index . The Saudi stock index slid just 0.1 percent on Wednesday, as did Qatar's index.
Fund managers said many investors were betting oil prices would not stay so low, anticipating a rebound in the new year when global producers are due to curb output. Investors expect state-linked funds to intervene again if necessary in some stock markets, such as Saudi Arabia, to prevent much larger losses.
Also, expectations for roughly $15 billion of passive foreign funds to flow into Saudi Arabia next year, when it joins emerging market indexes, are putting a floor under that market.
Saudi Basic Industries, the biggest petrochemical producer, fell 1.2 percent on Wednesday. But the sector as a whole held up well, with seven of the 14 stocks rising.
National Commercial Bank shed 1.4 percent. The bank said this week that it was in merger talks with Riyad Bank , which jumped to a four-year high on Tuesday and edged up a further 0.1 percent on Wednesday. Analysts said the merger could trigger wider banking consolidation.
Saudi Cable Co jumped its 10 percent daily limit after saying it reached a final settlement deal with creditors on 313.6 million riyals ($83.60 million) of loans. The firm will pay 109.8 million riyals with the remaining amount of 203.8 million riyals being waved off by creditors.
Qatar Islamic Bank fell 1.1 percent. But United Development rose 0.8 percent after saying it had finalised a sale agreement with an unnamed strategic Qatari investor for a plot at The Pearl Qatar project, for which it is master developer.
The Dubai index, which has been languishing near five-year lows, inched up 0.1 percent with Union Properties rebounding 3.5 percent.
GFH Financial, the most heavily traded Dubai stock, rose 5.5 percent. The company issued a statement saying a recent slide in its shares was primarily due to international and regional stock market pressures and margin calls; GFH said it enjoyed a sound financial position and was committed to maintaining its recent dividend distribution policy.
Egypt's blue-chip index snapped a three-day losing streak, rising 1.4 percent with 26 of its 30 stocks gaining.
Banks, which were hit hard by proposed changes to taxation of their income from Treasury holdings, continued to rebound with the largest lender, Commercial International Bank , adding 1.3 percent.
Sidi Kerir Petrochemicals gained 3.1 percent after five straight days of losses; it had earlier this week forecast a 14 percent rise in its 2019 profit after tax.
SAUDI ARABIA * The index lost 0.1 percent to 7,711 points EGYPT * The EGX 30 Index gained 1.3 percent to 12,840 points DUBAI * The index edged up 0.1 percent to 2,469 points ABU DHABI * The index was up 0.3 percent at 4,817 points QATAR * The Index shed 0.1 percent to 10,223 points KUWAIT * The index lost 0.3 percent to 5,257 points BAHRAIN * The index rose 0.4 percent to 1,318 points OMAN * The index was up 0.3 percent at 4,326 points (Editing by Andrew Torchia and Gareth Jones)