A return to risk appetite helped push Egypt's index climb 4.4 percent to 6,200 points from a 25-week low.

"Egypt's index follows the global market, but positive news on a local level is needed to maintain this rally," said Hashem Ghoneim from Pyramids Capital.

Saudi Arabia's Tadawul All-Share Index (TASI) rose 1.778 percent to 5,862.31 points to reverse some of the losses from the previous session which saw petrochemical stocks battered on falling oil price concerns.

A turnaround in the market saw all market sectors up on Wednesday, with gains ranging from 0.01 percent in the Media & Publishing sector to a gain of 3.84 percent in the Petrochemical sector amidst improving oil prices. Overall market breadth was also positive, with 103 advancers beating out 29 decliners, recording an AD ratio of 3.55, the Financial Transaction House (FTH) said in its daily market commentary.

Saudi Basic Industries Corp. (SABIC), the region's largest listing, climbed 4.23 percent to SR80, and the Kingdom's largest listed lender Al-Rajhi Bank advanced 2.41 percent to SR74.50.

"Saudi Arabia is dominated by retail investors and high net worth individuals - institutional presence is lacking - so the market is well known for being volatile," said Rami Sidani, Schroders Middle East head of investment.

"Retail get over-excited on the way up and panic on the way down. What the smart money will do is to try and take advantage of this inefficiency and mispricing - this is happening today."

In the United Arab Emirates, real estate stocks helped lift Dubai's benchmark 1.3 percent. Emaar Properties rose 1.5 percent and construction heavyweight Arabtec climbed 1.4 percent.

Concern of more debt trouble ahead in Dubai, this time over restructuring of Dubai Holding, owned by the emirate's ruler, were raised after Fitch Ratings downgraded Dubai Bank, held by a Dubai Holding subsidiary.

The Dubai index climbed 1.3 percent to 1,591 points, but The index in Abu Dhabi fell 0.1 percent to 2,647 points.

"It's nothing new that Dubai Holding may have some issues that need to be ironed out, but what we don't know is when this will happen or how big they will be," says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

Benchmarks in Bahrain, Qatar and Kuwait also gained slightly, but Oman's index fell to a 2010 low, with investors unconvinced that a Wednesday rally on regional and global markets could be sustained.

"There is strong selling pressure on the blue chips and it is coming from everyone - local portfolio managers, foreign investors, retail traders - because it seems people believe the (Europe debt) crisis is continuing and the rebound will only be for a day or two," said Adel Nasr, brokerage manager at United Securities.

"So people are taking today as an opportunity to sell." 

Bank Sohar lost 3.9 percent and Oman International Bank retreated 0.7 percent.

"It all depends on what happens on international markets - the global macro backdrop will continue to dictate the direction of regional markets, with domestic factors taking a back seat," Sidani said.    
   
- With input from agencies