DUBAI, Nov 20 (Reuters) - Gulf equity markets diverged in early trade on Sunday with corporate news buoying Dubai's market and Abu Dhabi's index weighed down by some of last week's top movers.

Dubai's index .DFMGI rose 0.4 percent, buoyed by a 10.8 percent jump in Shuaa Capital SHUA.DU after the investment firm announced that Abu Dhabi Financial Group (ADFG) had carried out a previously announced acquisition of 48.36 percent of the firm from Dubai Banking Group, a subsidiary of Dubai Group, for 0.705 dirham a share.

Although the purchase price was well below the market price, some investors are betting ADFG will develop Shuaa into a much bigger company.

Shares in GFH Financial Group GFH.DU were up 2.7 percent after the Bahrain based company announced along with Abu Dhabi Financial Group (ADFG) that they have appointed a chief executive, Talal al-Zain, for their Islamic finance joint venture in Abu Dhabi's financial free zone. urn:newsml:reuters.com:*:nL8N1DL02Y

Abu Dhabi's stock market index .ADI was down 0.7 percent as Union National Bank UNB.AD and Abu Dhabi Commercial Bank ADCB.AD , which were rumoured to be the next pair of banks to merge, traded lower before being suspended for trade. UNB was down 2.0 percent and ADCB was down 2.3 percent.

Similarly Abu Dhabi Islamic Bank ADIB.AD fell 0.8 percent before being suspended on market speculation that it will merge with Bank Alhilal.

Trade in Abu Dhabi Islamic Bank and Abu Dhabi Commercial Bank resumed after both banks said in separate statements that they were not in any merger talks. urn:newsml:reuters.com:*:nD5N1CO03W urn:newsml:reuters.com:*:nD5N1CO03X

In Saudi Arabia, the general market index .TASI was up 0.2 percent after 45 minutes of trade with the petrochemical sub-index .TPISI adding 0.4 percent on firmer crude oil prices. Brent futures LCOc1 settled at $46.86 on Friday, up roughly 5 percent for the week.

Banking shares, however, were a mixed bag with the majority of large-cap lenders, which have led the index higher over the past month, dipped on profit taking. Shares in Saudi Hollandi 1040.SE were down 0.8 percent.

(Reporting by Celine Aswad; Editing by Andrew Torchia and Susan Fenton) ((celine.aswad@thomsonreuters.com)(+9715 6224 7653))