• Saudi economy contracts 4.2pc in Q3, improves from Q2

• All real estate shares rise in Dubai's index

• Dubai sees biggest single-day rise in five months

DUBAI: Major Gulf markets extended gains to end higher for a second straight session on Tuesday, as the progress in the development of a coronavirus vaccine boosted hopes of a global economic recovery.

Pfizer Inc on Monday said its Covid-19 vaccine, developed with German partner BioNTech SE, was more than 90% effective in preventing infection.

The Gulf region also benefited from a rise in oil prices on the back of vaccine hopes, outweighing the expected negative impact on fuel demand from new lockdowns.

Saudi Arabia's benchmark index closed 0.5% higher, led by a 0.5% rise in Al Rajhi Bank, while National Commercial Bank advanced 2.4%.

The kingdom's economy shrank 4.2% in the third quarter from a year earlier, government data showed on Tuesday, a smaller contraction than in the second quarter when it was reeling under coronavirus-linked lockdowns.

Dubai's main share index finished over 2% higher, its biggest intraday gain since June 7.

Real estate stocks were among top gainers, with Emaar Malls closing over 14% higher, while Emaar Properties added about 3%.

Emaar Malls, which reported a 66% slump in its nine-month profit, however, said it was optimistic about the immediate future of the retail industry in Dubai for the remainder of 2020.

The Abu Dhabi index firmed 0.5%, supported by gains in index heavyweight First Abu Dhabi Bank and Abu Dhabi Commercial Bank, which gained 1.2% and 1.8%, respectively.

Further boosting the sentiment, United Arab Emirates said it has no plan to increase value-added tax to more than the current 5%.

Qatar's index reversed losses in morning trade to close the session 0.4% higher, with energy firm Qatar Fuel Co perched at the top of the index with a 5.4% gain.

Outside the Gulf, Egypt's blue-chip index climbed 2.2% with Commercial International Bank Egypt gaining 1.9%.-Reuters