Masraf Al-Rayan climbed 2.7 percent, Vodafone Qatar added 1.8 percent and Commercial Bank of Qatar rose 2 percent.

"Qatar volumes have picked up dramatically and new money is coming in to position for the long term," said a Kuwait-based analyst who asked not to be identified. "There is some selling for investors who had been holding Qatar stocks for a long, long time as they waited for Qatar to recover from the 2008 crash, but others are buying into any weakness."

The index climbed 0.9 percent to its highest finish since Sept. 29, 2008. It is up 7.7 percent since Qatar was chosen to host the 2022 soccer World Cup. Average daily turnover this month is more than double November's and triple that of October.

"The market is stretched, but given Qatar's prospects and continued buying, it's still looking strong," said the analyst.

Qatar's gas sector will help the country's economy expand 20 percent growth next year, the International Monetary Fund said on Monday, while economists polled by Reuters forecast GDP will grow 15.5 percent in 2010.

Saudi banks rallied, clawing back some of recent losses as investors switched cash from petrochemicals.

Samba Financial Group climbed 3 percent, Banque Saudi Fransi added 0.7 percent and SABB rose 1 percent. This trio, along with unlisted National Commercial Bank, agreed a $1.33 billion Islamic financing facility with Saudi Electricity Co. (SEC) on Monday. SEC rose 1.1 percent.

"Banking was the worst performer among the main sectors, but it is now stabilizing and starting to make gains," said Saleh Al-Onazi, vice-president of principal investment at Swicorp.

The banking sector index climbed 0.7 percent, trimming its losses since Sept. 25 to 4.7 percent. Bank shares fell following below-forecast third-quarter earnings.

Saudi Basic Industries Corp. (SABIC) fell 0.2 percent and Yanbu National Petrochemical Co. (Yansab) dropped 1.5 percent.

The Tadawul All-Share Index (TASI) surged 0.22 percent at 6,523.01 on Tuesday. The sector activity for the day was mostly positive with 11 out of 15 closing with gains ranging from 0.40 percent by the Telecommunication & Information Technology sector to 2.02 percent by the Media and Publishing sector; in addition, the Insurance sector had no change. On the other hand the losing sectors ranged from 0.15 percent by the Retail sector to 0.91 percent by the Cement sector. The overall market breadth for the day was positive with 78 advancers against 44 decliners giving it an AD ratio of 1.77, the Financial Transaction House (FTH) said in its daily market report.

The stock market turnover reached SR3.28 billion.

Dubai's index slumped to a new 13-week low at 1,644 points after making its fifth straight loss. Emirates NBD dropped 2.3 percent and Du fell 2.1 percent.

The Abu Dhabi index fell 0.6 percent to 2,728 points.

The Kuwaiti index edged up 0.02 percent to 6,788 points.

The Oman index fell 0.2 percent to 6,651 points.

The Bahraini index rose 0.2 percent to 1,427 points.
 
- With input from agencies