The Qatari index added 0.8 percent to 9,579 points, outperforming the rest of the region and closing at its highest level since June 5, when a diplomatic crisis with neighbouring Arab states erupted. It is now just 3.5 percent from its pre-crisis level, after dropping more than 10 percent at one stage.

Corporate earnings and macroeconomic data have shown the economy is suffering only minor damage from sanctions imposed by the other Arab states, and a Reuters poll of economists last week found them predicting Qatar will remain one of the Gulf's fastest-growing economies.

Doha Bank surged 2.3 percent, Islamic bank Masraf Al Rayan rose 1.0 percent and Qatar International Islamic Bank gained 0.5 percent after reporting a modest year-on-year rise in first-half net profit.

Islamic insurer AlKhaleej Group surged 2.8 percent in unusually heavy trade. Exchange data showed non-Arab foreign investors remained net buyers of Qatari stocks on Monday as Gulf investors continued to cut their Qatar holdings.

Saudi Arabia's index, on the other hand, edged down 0.2 percent with National Commercial Bank, the kingdom's largest lender, tumbling 1.2 percent after reporting a 0.9 percent fall in second-quarter net profit to 2.42 billion riyals ($645.3 million) thanks to lower operating income; SICO Bahrain had forecast 2.63 billion riyals.

Etihad Etisalat (Mobily) plunged 7.2 percent to 18.74 riyals after posting a quarterly net loss of 189.7 million riyals. Analysts had on average forecast a loss of 166 million riyals.

"We remain neutral on Mobily with a price target of 22.8 riyals. Weak sales, increasing competition and ongoing losses remain the key concerns. Mobily's ability to control its declining sales will be the key catalyst going forward," NCB Capital said in a report.

Banque Saudi Fransi gained 3.3 percent after reporting a 4.1 percent decline in quarterly net profit.

Retailer United Electronics jumped 5.0 percent; it will pay a first-half dividend of 0.75 riyal per share on Aug. 20, with the stock going ex-dividend on Aug. 5.

Dubai's index edged up 0.1 percent as Amlak Finance, which had surged in the past two days after a partnership deal with property developer DAMAC, pulled back 1.7 percent. The most heavily traded stock, builder Drake & Scull, added 2.0 percent.

Egypt's index edged up 0.3 percent but Ezz Steel sank 1.6 percent, falling for a fourth straight day after it reported worse-than-expected quarterly earnings last week.