Builder Arabtec climbed 6.4 percent, helping Dubai's index reach a new two-week high, but most Middle East markets fell, tracking losses in global equities.  

"The announcement Nakheel is finalizing its restructuring is helping sentiment and retailers are picking up Arabtec at current levels in the belief the company's cash flows will now be better," said Marwan Shurrab, vice-president and chief trader at Gulfmena Alternative Investments.   Some analysts have put the figure Nakheel owes Arabtec at around 2 billion dirhams ($544.5 million).

Nakheel is holding separate debt restructuring talks from those put in place by its parent, state-controlled conglomerate Dubai World.

Last week, a source told Reuters Nakheel would complete paying overdue debt to contractors, which include Arabtec, by the end of July. Dubai's index rose 1 percent to its highest finish since June 27.  

Like many traders, Mohamed Laboudi, Prime Emirates relationship manager, said he had expected UAE markets to decline as a US rally faltered, indicating a correction could be imminent following six straight gains on Wall Street.

"We thought investors would be wary of holding onto stocks over the weekend in case the US has a bad Friday, but we're getting buy orders from institutional clients, which implies they are confident of good Q2 numbers from select companies."  

Qatar Islamic Bank (QIB) fell 3.7 percent, its largest decline for seven weeks after reporting a 35 percent drop in second-quarter profit.

"The consensus is that QIB's top-line was good, but that provisions hurt the bottom line," said a Qatar analyst who asked not to be identified.