* Emerging markets sell off weighs on Gulf stocks
* Saudi index falls below 100-day average
* Qatari banks' Turkish exposure pulls down index
* But MENA equities could be "EM safe heaven," analyst says
* Emirates NBD drops in Dubai on Turkey's Denizbank deal
DUBAI, Aug 12 (Reuters) - Gulf stocks fell on Sunday, pressured by general weakness across emerging markets as investors steered clear of assets perceived as risky due to a diplomatic and economic spat between the United States and Turkey.
The Turkish lira plunged last week after U.S. President Donald Trump doubled tariffs on Turkish steel and aluminum imports. On Friday, the lira fell 18 percent to a record low.
Other geopolitical factors, such as the reintroduction of U.S. sanctions on Tehran, as well as the diplomatic dispute between Saudi Arabia and Canada, added further pressure to the markets.
The Turkish crisis weighed the most on the Qatar market. The index down 2.6 percent, was pulled down by Commercial Bank and blue-chip Qatar National Bank, which dropped 4.1 percent and 4.7 percent, respectively the two worst performing stocks in the Qatari exchange Sunday.
QNB owns Finansbank in Turkey and Commercial Bank has a majority stake in Turkish lender Alternatifbank.
In Saudi Arabia, the index fell 1.4 percent, below its 100-day average for the first time this year. It closed at 8,065 points, the lowest since late May.
Banks were mostly down, led by National Commercial Bank , which fell 3.2 percent on concerns about its exposure to Turkish assets. Al Rajhi Bank dropped 1.3 percent.
Despite Sunday's sell off, "MENA (Middle East and North Africa) equities remain under-represented in global portfolios (and are thus less exposed to global EM (emerging market) outflows)," said Sanat Sachar, equity research analyst at Al Mal Capital.
"GCC (Gulf Cooperation Council) equities are pegged to the U.S. dollar, and are thus insulated from the EM local currencies turmoil. This means that some asset allocators could even consider the GCCs as an EM safe haven.
According to Sachar, further turmoil in Turkey could exacerbate the differential between MENA equities and other emerging markets.
In Dubai, where the index shed 1 percent, Air Arabia was down 2.9 percent.
The company last week reported a 24 percent drop in second quarter profit. The low cost airline, which in June disclosed an exposure of $336 million to private equity group Abraaj headed for liquidation said in its financial statement for the first half of 2018 that a short term investment of 275 million dirhams in Abraaj had not been repaid after maturing at the end of June.
Air Arabia, however, had not made any provision for the investment "on the basis that the events are still unfolding," it said.
All eyes in Dubai were on the emirate's largest bank, Emirates NBD, which earlier this year agreed to buy Turkey's Denizbank from Russia's state-owned Sberbank for $3.2 billion.
There was an overhang on the bank's stock because of the Turkish deal, one analyst said. Shares were down 1.7 percent.
Arqaam Securities said in a note the sharp fall in the Turkish lira since the deal was announced could trigger a material adverse change clause, creating the possibility for a renegotiation of the deal.
"This provides ENBD an opportunity to reduce the acquisition price by as much as 27 percent," the note said.
Emirates NBD said in an email to Reuters it was closely monitoring the Turkish situation, but declined to comment whether the deal might be renegotiated.
* The index slipped 1.4 percent to 8,065 points.
* The index fell 1.1 percent to 2,889 points.
* The index fell 0.6 percent to 4,845 points.
* The index lost 2.6 percent to 9,635 points.
* The index fell 0.6 percent to 5,424 points.
* The index fell 0.1 percent to 1,348 points.
* The index went down 0.6 percent to 4,406 points.
* The index fell 1.2 percent to 15,738 points. ($1 = 3.6728 UAE dirham) (Additional reporting by Saeed Azhar; Editing by Mark Potter)