Banks led Qatar's index QSI to a new two-year high as investors bought into the gas producer's economic growth story.
Qatar National Bank (QNB) and Commercial Bank of Qatar (CBQ) each added 0.5 percent, with the latter lender among EFG-Hermes top 20 stocks for the Middle East and North Africa.
"CBQ and QNB are both attractive, but there's a significant discrepancy in valuations in favour of CBQ," said Fahd Iqbal, EFG Hermes strategist.
Qatar Navigation, which earlier this year merged with Qatar Shipping, is unchanged at Sunday's two-year peak, while Qatar Gas Transport Co (Nakilat) fell 0.5 percent.
"Nakilat has a very simple business model based on long-term contracts to deliver LNG (liquefied natural gas)," said Iqbal.
"Investors like the earnings visibility, but the stock has substantially underperformed and we believe this is because its dividend yield is less attractive than other names."
The index rose 0.2 percent to 8,209 points, hitting its highest level since Oct, 21, 2008.
Qatar's economy is forecast to grow 15.5 percent in 2010, according to a September Reuters poll of analysts.
Kuwait bluechips showed little movement, with trading lacklustre as investors await further news on a prospective stake sale in telecoms operator Zain to Abu Dhabi's Emirates Telecommunications Corp (Etisalat).
"Volumes have fallen dramatically and we haven't seen trading this slow for a long time," said a Kuwait broker who asked not to be identified.
"People are waiting to see if the Zain deal will go through, which is helping to support the market.
"Other than that, there's no news flow and we were amazed to return from Eid without a single new story to trade on. Hopefully that isn't a sign the market has topped."
The Zain deal, first announced in late September, would see Etisalat buy a controlling stake in its Kuwaiti rival in a deal led by major Zain shareholder the Kharafi group.
Etisalat has offered to pay 1.7 dinars per share, a 20 percent premium on their current price of KD1.42, but the sale will not be on a pro rata basis, spurring other Zain shareholders to try to scupper the deal.
On November 10, Zain board member Sheikh Khalifa Ali Al Khalifa Al Sabah told CNBC Arabiya he aimed to block that sale in the courts.
"There are some big players in the alliance opposing the deal and it seems to be getting stronger, but Kharafi and its allies are really pushing hard to get the deal through," the broker adds.
"People's opinions seem polarised and there isn't really much objective analysis. The people who want the deal to go through are convinced it will and the people who oppose it believe it won't."
Zain's shares were unchanged, while Kuwait Finance House fell 1.7 percent and Agility dropped 1.9 percent.
Kuwait's index KWSE edged up 0.04 percent to 6,971 points, taking its losses to 2.2 percent since November 2's 24-week high.
Emirates NBD slipped to a three-week low as Dubai's index DFM fell, giving up initial gains.
Emirates NBD dropped 1.8 percent, declining for a second session since Dubai Holding said it was restructuring.
The lender was one of two local banks on a Dubai World creditors committee and it seems investors are taking the latter's multibillion dollar restructuring deal agreed in September as a blueprint for a similar process at Dubai Holding.
Dubai World is government owned, while Dubai Holding is owned by the emirate's ruler.
"Dubai World has set a precedent and investors probably expect banks to take a haircut from Dubai Holding, with repayment over a longer period and at lower interest rates, but for the principal to be repaid in full," added EFG's Fahd Iqbal.
"If Dubai makes progress on its debt restructurings and we get more information on Nakheel's trade creditor sukuk, these should be supportive to Dubai's market."
Emaar Properties and Dubai Financial Market climbed 0.8 and 0.7 percent respectively.
The index slipped 0.2 percent to 1,700 points.
