Saudi Arabia's index reached a 25-week closing high on Monday.
The benchmark climbed 2 percent to 5,738 points. Saudi Basic Industries Corp (SABIC) rose 4.9 percent and Arab National Bank added 4.2 percent.
"Investors should be cautious, because this could be a bear market rally," said Shakeel Sarwar, Sico investment bank head of asset management.
"The markets have rallied significantly over the past six to eight weeks and while there has been an improvement in economic fundamentals, they could be running ahead of themselves."
Emaar Properties surged 5.7 percent to help Dubai's index end higher for the third session in four.
Rival developer Deyaar rose 5.1 percent as investors shrugged off huge falls in first-quarter earnings in Dubai's property sector.
Union Properties ended 1.33 percent lower after announcing an 87 percent drop in quarterly profit.
The Dubai index climbed 2.4 percent to 1,622 points.
Aramex ended 8.5 percent higher after seeing first quarter profit rise 19 percent.
Abu Dhabi's index also rebounded to close 1.7 percent higher at 2,562 points as the UAE capital's realty sector surged.
Trading volumes more than doubled to an 11-session high of 216 million shares.
Aldar Properties jumped 8.8 percent and Sorouh Real Estate climbed six percent.
Qatar's index hit a fresh 15-week closing high, boosted by increased trading from local and foreign investors in its fourth straight rise.
The benchmark climbed 1.9 percent to 5,881 points. Qatar Islamic Bank was the dominant gainer, rising 3.2 percent, while Industries Qatar added 1.8 percent.
Kuwait's benchmark also ended higher, climbing 0.3 percent to 7,629 points. The index is expected to consolidate around the 7,600-level, analysts say.
Logistics firm Agility was Kuwait's standout performer, rising 4 percent, but most financial stocks struggle to advance.
Bahrain's index rose 0.5 percent to 1,604 points.
Abu Dhabi's bank stocks rebounded to lift the UAE capital's index.
First Gulf Bank rose 6.2 percent, while Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank added 2.6 and 1.7 percent respectively. The Abu Dhabi index climbed 0.8 percent to 2,539 points.
Dubai's banks were also higher, with Emirates NBD edging up 0.4 percent and Dubai Islamic Bank rising 0.9 percent.
UAE banks declined on Sunday, matching falls in US banks late last week on concerns that a stress test of American lenders could see more than a dozen require extra capital. The results of the tests have been delayed until Thursday.
"FGB and Emirates NBD beat expectations, while the others showed growth from the fourth quarter of 2008," said Mohammed Yasin, Shuaa Securities chief executive, referring to recent first-quarter results.
"The results also gave a positive indication that banks' management may have taken excessive provisions in the fourth quarter and so this could provide extra profit if the economy improves towards the end of the year."
Yasin said banks may not see a drop in net profits in 2009 compared with the year before.
"This would be a great achievement. Government support has helped strengthen bank capital and provide extra liquidity," added Yasin.
The Dubai index climbed 1.1 percent to 1,602 points.
Small gains in bank stocks helped limit losses on the Oman index, which slipped 0.04 percent to 5,214 points.
Bank Muscat added 0.6 percent, while Bank Sohar and National Bank of Oman climbed 0.8 and 0.3 percent respectively. Oman International Bank was the exception, dropping 3.2 percent.
The bank gains were dwarfed by rises in some small-cap firms, with Al Jazeera Steel surging 3.9 percent.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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