Middle East markets were lackluster, with all benchmarks moving within a 1 percent range up or down as a summer slowdown and caution over earnings and the global economy curbed trade.

Taalat rose 4.6 percent.

Saudi Arabia's index ended flat. The Tadawul All-Share Index (TASI) closed Tuesday at 6,216.67 points. The sector activity for the day remained mixed with 7 out of 15 sectors closing with gains ranging from 0.05 percent by the Transport sector to 2.03 percent by the Agriculture & Food Industries sector. On the other hand the losses ranged from 0.01 percent by the Telecommunication & Information Technology sector to 1.08 percent by the Banks & Financial Services sector. The overall market breadth for the day was positive with 69 advancers against 51 decliners giving it an AD ratio of 1.35, the Financial Transaction House (FTH) said in its daily market report.

Saudi International Petrochemical Co. (Sipchem) ended 0.9 percent higher after reporting a jump in second-quarter profit.

Samba Financial Group fell 1.7 percent as its quarterly earnings slipped.

United Arab Emirates bourses would move sideways to lower due to continued doubts over banking and property sectors, he said.

Dubai's index climbed 0.4 percent to a two-week high of 1,508 points. The Abu Dhabi index fell 0.4 percent to 2,518 points.

Kuwait's index was almost flat ahead of quarterly earnings. Financial and investment firms dominate the bourse and derive much of their income from trading the market. 

The index fell 13 percent in the second quarter, so investors are fretting over how these firms will fare, analysts said. 

Meanwhile, the euro hit a two-month high against the dollar on Tuesday after Greece successfully tapped capital markets for the first time since late April, while stocks rallied on the US earnings season's strong start.

The euro gained 1.06 percent to $1.2722, its highest level in two months, also supported by hopes that companies will report strong second-quarter earnings on both sides of the Atlantic.

World stocks measured by the MSCI All-Country World Index rose 1.55 percent, while the FTSEurofirst 300 index of top European shares jumped 1.74 percent to, in its sixth consecutive session of gains.

The benchmark European stock index closed at a three-week high, with financial stocks among the top gainers. The STOXX Europe 600 banking index rose 2.17 percent.

The Dow Jones Industrial Average rose 160 points, or 1.57 percent, to 10,377.21, shortly after midday, while the Standard & Poor's 500 Index gained 16.20 points, or 1.50 percent, at 1,095.28. The Nasdaq Composite Index was up 35.75 points, or 1.64 percent, at 2,236.26.

The US dollar was also weaker against a basket of major currencies, with the US Dollar Index down 0.86 percent after government data showed the US trade deficit widened unexpectedly in May.

The greenback was also down 0.41 percent against the Japanese currency, at 88.26 yen.

The good performance on equity markets also boosted commodity prices in general, with prices of US crude oil rising more than 2 percent.

The August crude contract was up 2.47 percent at $76.80 per barrel.
 
- With input from agencies