* All Saudi petrochemical stocks, almost all banks drop
* Fawaz Abdulaziz Alhokair leaps on entry into MSCI index
* Qatar Fuel, Mesaieed slide on MSCI decision to exclude them
* First Abu Dhabi Bank surges on doubling of MSCI weighting
* Dubai Investments falls on move to small cap index
By Abinaya Vijayaraghavan and shakeel ahmad
Nov 14 (Reuters) - Saudi Arabia's stock market fell sharply on Wednesday as tumbling oil prices provoked broad selling of blue chips, while Qatar dived after MSCI excluded two of its major stocks in a semi-annual index review.
The Saudi index slid 1.2 percent to its lowest close in nearly three weeks after oil plunged roughly 7 percent overnight.
All 14 petrochemical stocks declined, with the biggest, Saudi Basic Industries, losing 1.8 percent. Eleven of 12 banking stocks also dropped as the largest, National Commercial Bank, declined 2.4 percent.
If the oil price slide continues, the government's plans to boost spending next year could be affected as revenues fall, squeezing business at banks.
Falling stocks outnumbered gainers by more than three to one but retailer and mall operator Fawaz Abdulaziz Alhokair jumped to hit its 10 percent daily limit after MSCI decided to add the stock to its Saudi Arabia small cap index.
Consumer appliance firm Shaker increased 5.2 percent, having risen from near record lows in heavy trade over the past two days.
The index in Qatar, which has been the best- performing market in the Gulf this year, dropped 1.1 percent.
Qatar Fuel Co was the biggest drag on the index, falling by its 10 percent daily limit, while Mesaieed Petrochemical was down 1.5 percent. MSCI decided, against market expectations, not to include both stocks in its global indexes.
Doha Bank lost 6.3 percent after MSCI moved it to a small cap index from the Qatar standard index, effective at the end of this month.
The Abu Dhabi index was up 1.1 percent as First Abu Dhabi Bank, the largest lender in the United Arab Emirates, rose 2.8 percent. MSCI decided to double its weight in the MSCI emerging markets standard index, Arqaam Capital said.
Abu Dhabi Commercial Bank rose 1.0 percent in light trade while Union National Bank added 0.6 percent. Barclays has been appointed by ADCB to advise on a potential merger plan involving UNB and Al Hilal Bank, Reuters reported, citing banking sources.
Egypt's blue-chip index lost 0.4 percent as investment bank EFG Hermes Holding fell 2.5 percent and Pioneers Holding tumbled 7.5 percent.
But Egyptian Iron and Steel rose 4.4 percent after it agreed to settle a $58.7 claim due to Banque Misr.
In Dubai, the index was flat with Emirates NBD rising 2.8 percent and Aramex adding 1.7 percent. But Dubai Investments shed 3.8 percent after MSCI decided to move the stock to its UAE small cap index from its United Arab Emirates standard index. SAUDI ARABIA * The index fell 1.2 percent to 7,660 points. DUBAI * The index was flat at 2,776 points. ABU DHABI * The index was up 1.1 percent at 5,021 points. QATAR * The index lost 1.1 percent to 10,199 points. EGYPT * The index was down 0.4 percent at 13,487 points. KUWAIT * The index was up 0.1 percent at 5,297 points. BAHRAIN * The index rose 0.4 percent at 1,311 points. OMAN * The index was down 0.2 percent at 4,460 points.
Editing by Andrew Torchia; Editing by Kirsten Donovan