UPDATE 9: Shares climb 3.9%, Saudi Arabia ends higher for fourth session in five.
Emaar Properties rallied to lift Dubai's index to a higher close as speculators targeted beaten-down stocks.
Emaar climbed 3.9 percent, rising for the fourth consecutive session, although it remained down since it announced plans in late June to merge with three real estate units of Dubai Holding, which is owned by Dubai's ruler.
"Emaar's merger announcement didn't go down well with investors," says Hashem Montasser, EFG-Hermes managing director and head of regional asset management, in Dubai.
"The concern is not so much the deal itself, but more the lack of clarity about the timescale and value. Emaar investors are rightly worried about their holdings being diluted and minority shareholders not getting their full rights.
"Until these issues are resolved, it will be a shadow hanging over the market and it's hard to see the index breaking out on the upside without Emaar."
Dubai Financial Market added 3.2 percent and Union Properties surged 5.5 percent.
Abu Dhabi's index reached a four-week closing high, buoyed by gains in property stocks.
The benchmark climbed 0.2 percent to 2,681 points, its fourth straight daily rise.
Aldar Properties and Sorouh Real Estate added 1.5 and 1.9 percent respectively.
National Bank of Abu Dhabi rose 5.3 percent, but First Gulf Bank plunged 4.4 percent. Their combined volume is 353,000 shares.
Declining bank and industrial stocks pushed Qatar's index lower for a second day as investors cashed in recent gains.
Industries Qatar was the main drag, sliding 1.4 percent.
It rose for a fourth day on Sunday, surprising analysts who expected the stock to decline following a 76 percent slump in second-quarter profit at rival manufacturer Saudi Basic Industries Corp (SABIC).
Banks also struggled. Qatar National Bank and Qatar Islamic Bank dropped 1.6 and 2.8 percent respectively.
Rival lender Masraf Al Rayan climbed 1.7 percent after a fivefold rise in second-quarter profit.
Qatar's index fell 1.1 percent to 6,295 points, its second straight decline since resurgent oil prices helped the benchmark gain 6.1 percent last week.
Saudi Arabia's index ended higher for the fourth session in five, spurred by Saudi Basic Industries Corp (SABIC) swift rebound from a sharp fall a day earlier.
The petrochemicals producer climbed 6.2 percent, recovering much of Sunday's 8 percent fall, which was sparked by a 76 percent decline in second-quarter profit.
SABIC's resurgence helped the index overcome declines in its three largest banks by market capitalisation, with Al-Rajhi Bank, Arab Bank and Riyad Bank all losing 0.4 percent. Saudi Telecom Co fell 4 percent
The benchmark climbed 0.7 percent to 5,718 points.
Zain ended lower after French media and telecoms giant Vivendi said it was calling off talks to buy a majority stake in Zain's African telecoms operations, saying the potential investment did not meet its financial criteria.
Zain shares fell 1.7 percent, pushing Kuwait's index to a decline for a second day. The benchmark slipped 0.1 percent to 7,538 points.
None of the five largest companies advanced, with Zain falling and four unchanged.
Bahrain's index rebounded slightly from Sunday's two-year closing low, climbing 0.6 percent to 1,493 points. (Reuters)