Industries Qatar (IQ) led the bourse to a six-month high on Sunday as an end-of-week spike in oil prices boosted demand for petrochemicals stocks, while most other Middle East markets rose on similar sentiment.
Oman's index made its largest advance since early January and Kuwait ended a two-session losing streak, but Dubai gave up early gains to decline for a second day in three and Saudi Arabia eased from Saturday's 17-month high.
IQ rose 2.2 percent to a 28-week intraday high. Oil ended on Thursday at its highest close since October 9, 2008.
"The news coming from the US was very positive and impacted regional markets today," says Keith Edwards, head of asset management at The First Investor. "IQ is the Qatar stock most sensitive to the global economy, so with the international backdrop positive, it's no surprise to see it rise." IQ will hold its annual meeting on Tuesday, with the company proposing a 50 percent cash dividend. Qatar's index rose 1.3 percent to its highest close since October 8.
"It's mostly retail traders in the market - institutions sold up at the month-end, so retail investors are buying now in expectation of these institutions coming back in soon," said a Doha trader who asked not to identified.
Emaar Properties fell 1 percent after saying it would roll over $1.23 billion of debt into long-term project financing deals. It was up 2.2 percent intraday.
"I don't think it's a big issue - it's a matter of Emaar restructuring its debt to a longer tenor," said Chamel Fahmy, Beltone Financial regional senior sales trader.
"The company's debt-to-equity ratio is still low and Emaar has a low financial risk for investors, but maybe some retail traders misinterpreted the statement and so there was some selling pressure on the stock."
Dubai's benchmark dropped 0.5 percent and the Saudi index also declined as volumes fell to a three-week low. Saudi Arabia has been the top regional performer over the past 12 months, rising 37 percent, although turnover has slumped.
"Iran is worrying many investors and there are expectations there could be military action," said Youssef Kassantini, an independent financial analyst.
"Investors are finding it's difficult to gauge the risk-reward ratio in the market. Some think it's time for a correction and technical analysis points to the market being over-run - it has risen faster than company earnings."
On Saturday, Iranian President Mahmoud Ahmadinejad rejected a renewed US call to engage diplomatically.
Al Jazeera Steel climbed 1.9 percent, helping Oman's index rise.
"Global commodity and metals prices have gone up for the past month," said Shailendra Singh, investment manager at Oman's Al-Shurooq Securities. "Steel is key to Oman's infrastructure spending, so investors believe sector profits will increase." Chinese steel prices are at a seven-month high, rising 12 percent in March.
QATAR Index rose 1.3 percent to 7,571 points.
OMAN: The benchmark rose 1.3 percent to 6,811 points.
DUBAI: The index fell 0.5 percent to 1,851 points.
ABU DHABI: The measure edged up 0.04 percent to 2,861 points.
KUWAIT: The measure rose 0.6 percent to 7,523 points.
SAUDI ARABIA: The index fell 0.06 percent to 6,822 points.
BAHRAIN: The index rose 1.4 percent to 1,564 points.
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