Oman hit a similar milestone and Qatar edged up 0.3 percent to its highest finish since April 14, but Kuwait fell and Saudi Arabia was flat in a mixed day on Middle East markets.

Builder Arabtec rose 6.3 percent, trimming its year-to-date losses to 25 percent, after government developer Nakheel said it expects to complete its debt restructuring by the end of the year. Arabtec is one of Nakheel’s trade creditors.

“Arabtec is cheap compared to Drake & Scull and other similar stocks, so it is playing catch up,” said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.

Drake & Scull rose 0.2 percent to be up 3.3 percent in 2010. Dubai’s index climbed 1.6 percent to its highest finish since May 13 and taking its September gains to 15.7 percent. 

“We are coming from a low base and the market had a chance to correct -- if this was going to happen it should have done so already,” said Arabi. 

Local markets would rally to year-end, he added, providing world stocks remained upbeat.

Saudi Electricity  rose 2.5 percent to a 17-month high, extending gains since winning a $480 million government contract, but the Kingdom’s index ended flat and little movement is expected until third-quarter results season starts next week.

The Tadawul All-Share Index (TASI) closed flat at 6,453.23 points after gaining 0.1 points; up 0.00 percent.The sector activity for the day was mixed with 8 out of 15 sectors closing with gains ranging from 0.02 percent by the Transport sector to 2.28 percent by the energy & utilities sector. On the other hand losing sectors ranged from -0.02 percent losses by the Retail sector and Building & Construction sector to -0.48 percent loss by the agriculture & food Industries sector. The overall market breadth for the day was strongly positive with 71 advancers against 43 decliners giving it an AD ratio of 1.65. the Financial Transaction House (FTH) said in its daily market commentary.

Kuwait’s Zain fell 3.1 percent, slumping to a three-week low after the firm said it had approached banks for a $1.5 billion syndicated loan.

“Zain has received a lot of cash from its African asset sale, so investors are wondering why it needs to take on more debt,” said a Kuwait trader who asked not to be identified.

Earlier this year, Zain sold African assets to India’s Bharti Telecom for $9 billion.

Burgan Bank fell 5.3 percent and Gulf Bank and Boubyan Bank dropped 2 percent. The banking index fell 1.4 percent, trimming its year-to-date gains to 25 percent. 

“This is some normal profit-taking after the rally of the past month or so — banks were becoming expensive compared to their Gulf peers,” said Essa Al-Hasawi, assistant manager at Zumorroda Investment Co in Kuwait.

Qatar’s index rose 0.3 percent. It is up 10.4 percent in 2010.

“Valuations are stable — the market is neutral, neither expensive nor cheap, so effectively we believe investors should be in the market because there isn’t much downside risk,” said Robert Pramberger, acting head of asset management at Doha-based investment company The First Investor. 

Egypt’s index rose for a sixth session as investors bought real estate stocks on expectations of a swift resolution to a dispute over a sale of state land to Talaat Moustafa Group (TMG). Talaat slipped 0.1 percent, but Palm Hills added 1.2 percent.

“Negative sentiment has faded away around TMG,” said Pharos Securities Account Officer Karim Hosny. “But it was under some pressure today as all the good news was factored in.”

Meanwhile, Abu Dhabi’s stocks  climbed 0.7 percent to 2,657 points while Kuwait’s index slipped 0.2 percent to 6,824 points.