Saudi Arabia's index slipped 0.2 percent from Saturday's four-month high. Some investors booked profits and some took positions in large-cap stocks ahead of their annual results. 

"Money is shifting from insurance to chemicals and banks, but the amount (invested) is stable," said Tarek Al Mady, a Riyadh-based financial analyst.

"We'll start to know the companies' results soon and people are building (positions) before them." 

Saudi Basic Industries Corp (SABIC) shed 0.5 percent, Saudi Arabian Fertilizers slipped 1.7 percent and Al-Rajhi Bank dipped 0.4 percent.      

Dubai's index rose 0.9 percent, trimming 2011 losses to 14.3 percent. 

Emaar Properties gained 3.3 percent, Emirates NBD advanced 1.6 percent and contractor Arabtec climbed 2.7 percent. 

MSCI will announce on Dec. 14 whether it will upgrade UAE and Qatar to emerging market status from frontier markets, having delayed its decision from June, a move that could help attract foreign investment. 

"Some of the institutionals believe that there might be a positive decision from MSCI and even if there isn't, they will lose nothing," said Samer al-Jaouni, general manager of Middle East Financial Brokerage Company.

"Taking into consideration that prices are low, investors can take advantage of any possible gains."  

Abu Dhabi's benchmark climbed 0.7 percent with banks supporting. 

National Bank of Abu Dhabi rose 1.9 percent and First Gulf Bank climbed 1.6 percent.  

The markets also were helped by hopes for a knock-on benefit from fresh funds into Saudi Arabia's stock market.    

Sources said the Kingdom's Capital Market Authority wants to allow direct ownership of local shares by foreign investors that manage at least $5 billion of assets.

"It might encourage (foreign) fund managers to devote more attention to the whole region," said Paul Gamble, head of research at Riyadh-based Jadwa Investment.  

In Oman, local institutional buying helped lift the index to a 10-week closing high, rising 0.8 percent. Analysts said attractive valuations and expectations for high-yield dividend are boosting buying. 

Bank Muscat gained 1.1 percent and Oman Telecommunications rose 1.2 percent.  

"Overall, we believe the risk-reward ratio is turning positive looking at the medium term," said Kanaga Sundar, Gulf Baader Capital Markets head of research. "We saw accumulation across the frontline counters from the local institutions."  

In Kuwait, the index slipped 0.2 percent, down 15.8 percent so far in 2011 as political instability weighed. 

"Overall, the sentiment is still negative because of political instability," a Kuwait-based trader said.

"While in the past, the parliament being dissolved was taken as a positive and progressive step, the difference this time is that you don't have a government." 

The market may see an upside if a new parliament is elected with new members, the trader added.