Gulf Arab markets rose on Sunday, with the Dubai and Kuwait benchmarks pulling away from six-year lows to track gains a day earlier on Saudi Arabia's bourse, the region's largest. The kingdom's index rose 0.9 percent after surging 7.3 percent on Saturday to end a 14-session losing run.
-- Dubai, Kuwait edge away from 6-year lows
"Buying is short-term and based on a market bounce, rather than a full recovery," said Walid Shihabi, Shuaa Securities chief executive. "Saudi Arabia is looking for direction and the main concerns remain."
Gulf Arab markets had tumbled in the wake of deadly unrest in Oman and Bahrain, sparking fears turmoil would spread to Saudi Arabi, with the latter's Shia minority staging some small protests in the oil-producing eastern region.
Some buyers have now returned, but volatility remains acute.
"Gulf markets have been taking their cues from Saudi Arabia, with a very strong correlation," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.
"This is a great opportunity to sell rather than buy - nothing much has really changed in terms of the regional political picture. There are rumours of more protests taking place in the Gulf and March 11 will be a key day to look out for in Saudi."
More than 17,000 have backed a call on Facebook to hold two demonstrations in Saudi Arabia this month, the first one slated for March 11, while Saudi authorities on Saturday warned a ban on marches would be enforced.
Dubai's index made its largest gain in four weeks, rising 2.7 percent. Air Arabia climbed 2.2 percent and was the most active stock, accounting for about a fifth of all shares traded. The low cost carrier's shares had slumped on fears regional turmoil would disrupt its operations and as rising oil prices likely increased fuel costs for airlines.
"Near term volatility should continue. Last week's sell-off was over-done," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.
Kuwait's index rose for a first session in four.
Zain, subject to a protracted $12 billion take-over bid by the UAE's Etisalat, ended flat, having surged 4.7 percent in the preceding session.
The telecoms firm has proposed a 200 fils per share dividend after it swung to a fourth-quarter profit.
"It's mostly down to Saudi's rise yesterday, but there's also some euphoria from Zain announcing its dividend," said a Kuwait trader who asked not to be identified.
"The market no longer thinks the Zain-Etisalat deal will go through, but a nice dividend yield is good compensation."
Zain shares are widely used as collateral by investors to borrow from banks and lenders' shares were among the biggest gainers. Kuwait Finance House climbed 5.7 percent and Gulf Bank rose 3.2 percent.
National Bank of Kuwait fell 1.5 percent after Moody's put Kuwait's largest listed lender on review for possible downgrade.
Oman's Rrscenaissance Services climbed 4.4 percent after saying it aimed to raise about $500 million in a London listing of a Dubai-based unit.