Qatar's index posted its largest one-day gain in four weeks and ended at an 11-month high on Tuesday on renewed buying ahead of annual results, while Egypt's bourse slipped on lingering political uncertainty. Doha's index rose 1.1 percent to its highest close since February 2011. It broke the strong resistance level of 8,800 points, which now provides support.
Heavyweight Qatar National Bank gained 1.7 percent and Qatar Telecom and Doha Bank each ended 2.3 percent higher. "Both Qatar and UAE are reacting to positive sentiment at the start of New Year in Asian markets," said Samer al-Jaouni, general manager of Middle East Financial Brokerage Co.
"Expectations in Qatar are still of higher dividends than in 2010 and investors are buying ahead of 2011 financial statement announcements," he added. Better-than-expected data from China's manufacturing sector boosted global stocks on their first day of trading in 2012.
In Egypt, the main index dipped 0.7 percent in muted trade. Egyptians voted in the third round of a parliamentary poll on Tuesday but must wait until the conclusion of a presidential vote later this year to know whether a promised handover from military to civilian rule has succeeded.
"We've got to get rid of some of the uncertainty," said Tariq Hussein, a senior manager at brokerage CIBC. "Once we have a fairly elected parliament in place, that should bode well for sentiment." Elsewhere, Saudi Arabia's index climbed 0.2 percent, helped by petrochemical and banking stocks. Bellwether Saudi Basic Industries Corp (SABIC) gained 0.5 percent, Advanced Petrochemical climbed 2.1 percent and National Industrialisation rose 0.6 percent.
Rising tension in the Gulf pushed crude above $110 a barrel after Iran test-fired two long-range missiles. Saudi petrochemical stocks tend to track oil prices, with crude impacting their bottom line. Banque Saudi Fransi ended 1.7 percent higher. It proposed a 25 percent capital increase through a bonus share issue to help fund the bank's expansion, according to a bourse statement.
In United Arab Emirates, Dubai's index ended 0.7 percent higher and Abu Dhabi's measure rose 0.5 percent. Aldar Properties and Sorouh Real Estate fell after recent gains, closing 3.2 percent and 4.8 percent lower respectively. Elsewhere, Oman's benchmark climbed 0.2 percent, rallying for a fifth straight session as investors made a play on earnings. Kuwait's bourse slipped 0.2 percent, falling for the fourth session in five.