Volumes in Qatar stay muted as investors are still away on year-end holidays
Petrochemical stocks helped lift Saudi Arabia's all-share index while turnover was high in insurance stocks as investors were unwilling to commit to large-caps before fourth-quarter earnings.
The benchmark climbed 0.2 percent to close at 6,399 points, trading higher in three of last five sessions.
Heavyweight and bellwether Saudi Basic Industries Corp (SABIC) gained 0.5 percent and Saudi Cement rose 1.4 percent.
Rabigh Refining and Petrochemical Company ended 0.4 percent higher. All production units at its refining and petrochemical complex have completed the lenders reliability test on Saturday by running the complex at 97 percent of its production capacity for 210 days, the company said in a statement on the Saudi stock exchange.
"Banks, construction and petrochemical stocks are the best option available for investors right now compared to other markets inside or outside our region," said Tarek Al Mady, a Riyadh-based independent financial analyst.
"Prices for large-caps haven't changed much in the last 12-months and are considered cheap if the annual results are good. Many traders think the market should go up by 100-200 points because of the prices," Al Mady adds.
Short-term retail investors often target insurance stocks when amid uncertain market conditions.
Buruj Cooperative Insurance jumped 9.7 percent, Al Ahli Takaful climbed 5.7 percent and Al Ahlia ended 5.4 percent higher.
UAE markets halted two-session gains with investors finding little reason to add risk, while Aldar Properties ended higher, rising since the announcement of asset sales to Abu Dhabi.
Abu Dhabi's benchmark slipped 0.2 percent to close at 2,397 points and Dubai's index dipped 0.9 percent to 1,342 points.
Aldar ended 2.2 percent higher, having gained as much as 5.4 percent in early-trade, accounting for more than half of all shares traded on the benchmark.
The government bailed out Aldar on Wednesday with an AED16.8bn ($4.57bn) lifeline, buying assets and retiring a loan.
"UAE is perhaps the only market with a lack of positive catalyst compared to its peers," said Amer Khan, fund manager, Shuaa Asset Management. "The only exception is event driven trading like what happened to Aldar but apart from that, there would be precious little reason to attract foreign investors."
Dubai's Emaar Properties shed 2.7 percent and Dubai Islamic Bank fell 1 percent.
In Qatar, the index ended little changed, edging up 0.08 percent to 8,786 points. Volumes were muted as investors are still away on year-end holidays.
Heavyweight Qatar National Bank gained 0.7 percent and Industries Qatar rose 1.1 percent.
United Development ended 6.8 percent lower, down for a second trading session after it said last week that it was in talks to issue 80 million new shares to a state pension fund.
Shares in the developer had rallied to a two-year high in the days ahead of the Dec 28 announcement.
The deal would see UDC issue the new shares at QR20 each to the pension fund, pending shareholder approval.
Omani stocks expected to post strong 2011 earnings helped lift the index for a fourth consecutive session as trading activity recovered.
Al Jazeira Services ended 6 percent higher and Oman Emirates Investment Holding closes 5.3 percent up. Oman National Investment climbed 4.7 percent.
"It's expected that the results to be announced won't be as bad as anticipated in the beginning of December," said Vickneswaran Gowribalan, a Muscat-based fund manager.
Oman's benchmark climbed 0.1 percent to end at 5,710 points, its highest since the Dec 18 close.
"There is strong buying on expectations for dividend yield and Q4 earnings mainly from traders and local asset managers," said Adel Nasr, United Securities brokerage manager.
Al Hassan Engineering rose 2.3 percent, ahead of an expected infrastructure project award. The firm, along with Galfar Engineering, is likely to win government contracts, Nasr said. Shares in Galfar edged up 0.3 percent.
Elsewhere, Kuwait's index ended 0.4 percent lower at 5,792 points, booking gains following a year-end window dressing on Thursday.