Gulf markets rebound on Thursday after recent weakness, tracking higher oil prices and as an MSCI upgrade play returns to the market.
Brent crude rose to $118 on Thursday after Saudi Arabia failed to convince OPEC to raise output targets, and data showed United States crude stocks fell sharply last week.
The United Arab Emirates and Qatar are under review for an index upgrade by compiler MSCI and will announce around June 21 whether it will upgrade the countries from the “frontier markets” category, a move that could open up the countries' bourses to multi-billion dollar liquidity and drive index fund investments.
Abu Dhabi's index ends on a six-week high and Qatar's market rises on a technical rebound.
"Markets have been moving up on extremely thin liquidity - so it's easier to influence it with minor (cash) injection," says Sachin Mohindra, senior vice-president, portfolio manager at Invest AD.
Abu Dhabi's index gains 0.3 percent to 2,703 points, its highest close since April 27.
Telecoms operator Etisalat climbs 0.9 percent.
Dubai's benchmark rises 0.3 percent to 1,557 points, but volumes drop to a four-week low.
Emirates NBD, Dubai's largest bank by market value, gains 2.2 percent to hit a six-week high after saying it was looking for acquisition opportunities to boost its asset management business.
Bellwether Emaar Properties gains 1 percent.
Elsewhere, Qatar's index climbs 1.1 percent to 8,276 points, rising for a second day in three since Monday's two-month low.
On May 30, the chairman of Qatar's bourse said the country would not increase foreign ownership limits on stocks in 2011 - a key issue for an MSCI index upgrade.
Industries Qatar, the second largest stock on the index by market value, jumps 3.7 percent.
"IQ - that's where foreign ownership is an issue - corrected substantially after the (the chairman's) announcement, so this is a bounce back from local buyers," says Mr. Mohindra.
Investors are waiting for a decision from the index compiler, expected on June 21, and markets are looking for direction in the meantime, he adds.
Qatar Telecom gains 2.9 percent.
Oman's index rebounds on a technical correction after falling sharply on Wednesday amid a negative global backdrop and second-quarter earnings concerns.
Bluechips lead the benchmark higher 0.3 percent to close at 6,016 points.
"The market was up for the day on a technical rebound driven by frontline counters, the benchmark index closed on a major support level of 6,000 points yesterday," says Kanaga Sunder, Gulf Baader Capital Markets head of research.
Bank Muscat gains 0.8 percent, Renaissance Services rises 0.7 percent. Galfar Engineering climbs 2.9 percent.
"Oman has overreacted to the negative news in recent times. Whether this rally is sustainable? This needs to be watched out for in the coming trading sessions," he adds.
Elsewhere, Kuwait's index ends flat at 6,307 points, a week-low.