Saudi Arabian stocks extended losses in early trade on Tuesday, as traders booked profits after the benchmark index hit a nine-month high last week, while the Dubai index hit an eight-year high.

Saudi Arabia's benchmark index dropped 0.5%, on course to extend losses for a third session, weighed down by a 2% fall in Al Rajhi Bank as the lender traded ex-dividend.

However, Bupa Arabia, the kingdom's second largest insurer, jumped more than 4% after reporting a sharp rise in second-quarter earnings.

Iran's foreign ministry spokesperson said on Monday that a normalisation of ties between Saudi Arabia and Israel would harm regional peace and stability.

Dubai's main share index gained 0.2%, hitting its highest since 2015, with blue-chip developer Emaar Properties leading gains and rising 3.1%.

In Qatar, the index advanced 0.9%, led by a 2.4% rise in Qatar Islamic Bank and a 1.9% increase in petrochemical maker Industries Qatar.

The Abu Dhabi index eased 0.1%, weighed down by a 1% slide in the country's biggest lender First Abu Dhabi Bank .

Prices of oil - a key catalyst for the Gulf's financial markets - slipped, but were still near a three-month high reached in the previous session on signs of tightening global supply, as producers implement output cuts, and strong demand in the United States, the world's biggest fuel consumer.

(Reporting by Ateeq Shariff in Bengaluru; Editing by Rashmi Aich)