SABIC shares ended unchanged at SR87.75, having fallen as much as 2.6 percent intraday after reporting a second-quarter profit, 11 percent below an average of forecasts as declining product prices hit revenues.

"SABIC remains a pure play on the global economy," Credit Suisse wrote in a research note. "One cannot ignore the signs of lower pace of recovery which increase the uncertainty of demand outlook...with the recent recovery in crude oil prices, we might see an improved pricing environment by Q4."

Credit Suisse kept its outperform rating and price target of SR120 and other analysts said the stock remained cheap, although doubts remain over the sector's growth prospects.

"The wider expectation is for petrochemicals earnings to have peaked for this year in the first quarter and for margins and profitability to decline," said a petrochemicals analyst who asked not to be identified.

Savola Group dropped 2.3 percent after its second-quarter profit fell, but Saudi Arabia's Tadawul All-Share Index (TASI) rose 0.23 percent to end at 6,131.3 points.

The sector activity for the day was mostly positive with 10 out of 15 sectors closing with gains ranging from 0.21 percent by the Petrochemical sector to 2.51 percent by the Energy & Utilities sector. On the other side the losses ranged from 0.08 percent by the Multi-Investment sector and Transport sector to 1.20 percent by the Cement sector. The overall market breadth for the day was positive with 84 advancers against 37 decliners giving it an AD ratio of 2.27, the Financial Transaction House (FTH) said in its daily market commentary.

Abu Dhabi's Aabar Investments rose 9.6 percent to 1.72 dirhams, surging for a second day since the market regulator told the company to increase its buyback offer price to minority investors to 1.95 dirhams per share as it seeks to delist from the bourse. The Abu Dhabi index gained 0.3 percent to 2,534 points.

Emirates Telecommunications Corp. (Etisalat) fell 0.5 percent to 10.35 dirhams after its second-quarter profit dropped 21 percent, while domestic rival Du added 0.5 percent.

"Etisalat revenues were in line with expectations, but net income fell short," said Irfan Ellam, Al-Mal Capital telecoms analyst. "We still think the stock offers strong upside."

Al-Mal kept a "buy" recommendation on the stock, setting a price target of 14.66 dirhams.

"Du is a factor because we estimate 85 percent of Etisalat's revenues still come from domestic operations," added Ellam.

The Dubai index climbed 0.7 percent to 1,518 points.

"We would normally expect revenue to increase year-on-year and quarter-on-quarter for companies that are performing well, but the latter was only marginally up and that was probably because of more domestic competition."

A selloff in global stocks lost steam on Monday and the euro erased losses.

"We seem to be following global equity markets," said Robert McKinnon, ASAS Capital chief investment officer.

"Other than that, we're waiting for more regional earnings and there could be some positive surprises, but these are more likely to come in the third and fourth quarters, with the focus on banks. 

"By then, we may see banks turn the corner in terms of provisioning - it's a waiting game and this would be the main gauge for the regional economies and particularly the UAE."

The Omani index inched up 0.1 percent to 6,227 points. The Qatari index rose 0.2 percent to 6,924 points. The Kuwaiti index rose 0.1 percent to 6,501 points.
 
 
- With input from agencies