UPDATE 4: DFM rises 1% to 1,520 points, its highest finish since June 27.
Arabtec surged a day after indebted developer Nakheel said core banks "unanimously approve" its restructuring proposal, helping Dubai's index DFM reach a new two-week high.
Arabtec climbed 6.4 percent, accounting for more than a third of all shares traded on the bourse. The builder is one of Nakheel's trade creditors. Last week, a source told Reuters that Nakheel would complete paying overdue debt to contractors by the end of July.
"The announcement Nakheel is finalising its restructuring is helping sentiment and retailers are picking up Arabtec at current levels in the belief the company's cash flows will now be better," says Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.
Dubai Financial Market climbed 2 percent and Drake & Scull added 1.7 percent.
The index rose 1 percent to 1,520 points, its highest finish since June 27.
Like many traders, Mohamed Laboudi, Prime Emirates relationship manager, said he had expected UAE markets to fall on Thursday as a U.S. rally faltered, indicating a correction could be imminent following six straight gains on Wall Street.
"We thought investors would be wary of holding onto stocks over the weekend in case the U.S. has a bad Friday, but we're getting buy orders from institutional clients, which implies they are confident of good Q2 numbers from select companies."
Abu Dhabi's index ADI slipped 0.1 percent to 2,524 points.
Kuwait's index KWSE ended lower for a first day in three as some investors tried to reduce positions ahead of further earnings announcements.
With many companies making their money by investing in the stock market and shares prices broadly declining in the second-quarter, investors are cautious, analysts said.
"Across the board we expect Q2 profits to be below Q1," says a Kuwait trader who spoke on condition of anonymity.
Kuwait Finance House was the main drag, falling 2 percent. The Islamic lender is expected to report a 2.4 percent decline in quarterly profit, according to an estimate from EFG-Hermes.
The index fell 0.4 percent to 6,513 points, taking its losses to 7 percent this year.
Qatar Islamic Bank (QIB) made its largest decline for seven weeks after reporting a 35 percent drop in second-quarter profit, weighing on Doha's index QSI.
QIB fell 3.5 percent, its biggest decline since May 25 as provisions dented profit.
Other bluechips also slid. Barwa Real Estate fell 1 percent and Industries Qatar lost 0.7 percent.
The index fell 0.8 percent to 6,964 points, its second decline in three days.
Bank Dhofar rose after reporting a 16 percent rise in second-quarter profit, helping Oman's index MSI end higher for a ninth session in 11.
Bank Dhofar rose 1.2 percent, despite its earnings falling short of estimates.
"Bank Dhofar's net profit is encouraging and completely in sync with our estimates," said Gunjan Gupta, head of research at Oman Arab Bank.
"We believe the stock has already moved upwards and adjusted for higher growth expectation. At current multiples, Bank Dhofar is expensive amongst local peers, thereby making it less attractive."
The index edged up 0.04 percent to 6,218 points.
Bank Muscat slipped 0.2 percent, declining for a second day since its quarterly profit missed forecasts.
"Except for Bank Muscat, all other results - NBO (National Bank of Oman), Bank Sohar and Bank Dhofar - are in line with our expectations," said Gupta.
"Bank Muscat losses came as a negative surprise, which together with sluggish operating profit resulted decline in net profit."
Bank Sohar fell 1.8 percent, while NBO was flat, a day after reporting a 21 percent rise in quarterly profit. (Reuters)