Dubai's index advanced 0.3 percent to 1,756 points — its highest close since April 26, while Abu Dhabi's benchmark climbed 0.7 percent to 2,722 points — its highest closing level since May 24.

Other Middle East markets ended mixed, with Qatar and Bahrain closing higher, while Kuwait, Oman, Egypt and Saudi Arabia declined.

Traders said that investors in Dubai are building positions on hopes that third-quarter earnings may be better than expected, especially for banks, and that the expected new regulations on loan classification will hurt lenders' results.

Emaar Properties dominated trading in Dubai, rising for a fifth straight session to reach its highest level since April 25.

Orascom Telecom closed 2 percent lower after Algeria's finance ministry launched a tender to choose an adviser for its planned acquisition of Orascom's Algerian unit, pushing Egypt's main index down 0.3 percent to 6,805 points.

In Oman, industrial stocks declined, led by Oman Cable Industries which fell 3 percent, as investors focused on banks which they hope will show strong results.

Saudi banks continued to trade lower, dragging down the index, while petrochemical stocks advanced thanks to higher oil prices.

The Tadawul All-Share Index (TASI) closed 0.82 percent down at 6,367.84 points. The sector activity for the day was mostly negative with 11 losing sectors against 4 gaining sectors. The losing sectors ranged from 0.34 percent by the Real Estate Development sector to 1.20 percent by the Petrochemical Industries sector. On the other hand the gaining sectors for the day ranged from 0.09 percent by the Transport sector and the Hotel & Tourism sector to 0.24 percent by the Energy & Utilities sector. The overall market breadth for the day was negative with 31 advancers against 95 decliners giving it an AD ratio of 0.33, the Financial Transaction House (FTH) said in its daily market commentary.

The liquidity for the day reached SR2.96 billion.

The Qatari index gained 0.8 percent to 7,830 points.

The Omani index fell 0.2 percent to 6,498 points.

The Kuwaiti index eased 0.06 percent to 7,009 points.