Dubai real estate developer Emaar Properties rallied to its highest level since April 2011 yesterday, lifted by forecast-beating second-quarter earnings, but trading across the rest of the Gulf region was more mixed.
Shares in Emaar rose 4 per cent to close at 3.37 dirhams a share after the developer said its quarterly profit more than doubled to 614 million dirhams ($167.2m), as a one-off impairment cost was not repeated and retail and hospitality income grew.
The company's chairman predicted a rebound in the property sector in the emirate, saying the first half of the year was a reflection of the growing strength of Dubai's economy.
Trading on Emaar accounted for more than a quarter of all shares traded on the index which rose just under 2pc to a 12-day closing high.
Real estate stocks also lifted the Abu Dhabi index which ended 0.4pc higher. Aldar Properties and Sorouh Real Estate gained 0.9 and 2pc respectively.
Saudi Arabia was also a gainer yesterday, ending 0.8pc higher, as banks and petrochemical stocks advanced.Heavyweight Saudi Basic Industries Corp (SABIC) rose 1.4pc, outperforming the petrochemical index which increased 0.9pc."Petchems this week are largely benefiting from some stability in oil prices and the outlook for oil, driven by hopes there will be strong measures to stimulate the U.S. economy and measures on Europe's debt crisis," said Asim Bukhtiar, head of research at Riyad Capital.
"Speculation over central bank action looks like it has gone too far," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt. "The euro has already begun to retreat and oil has also started to weaken. The move upwards seemsexaggerated."
Egypt's index was also slightly higher, rising 0.2pc to 4,766 points, with investors holding off on building new positions until a new government is formed.
"We will stay tied in a very narrow tapping range at least until Thursday and then the market's direction will be somehow clear with the formation of the government," said Shamel Fahmy of Pharos Securities.
All other exchanges in the Gulf fell, with few catalysts to support buying activity.
Bahrain's index fell nearly 1pc, dragged lower by Ahli United Bank which slid 1.7pc. The lender, Bahrain's largest by market value, reported a 3.7pc rise in second-quarter profit but provisions grew 6pc over the same period in 2011.