DUBAI: Kuwait's bourse stood out in an otherwise sluggish region on Sunday as investors were encouraged by government spending plans, a positive outlook for the banking sector and a string of debt settlement deals.

The Kuwaiti index climbed 1.5 percent to a one-month closing high of 7,179 points, its biggest daily gain since October. Trading volume picked up to its highest level since mid-May, a positive technical sign.

Fouad Darwish, head of brokerage services at Global Investment House in Kuwait, said investors' optimism was fuelled by expectations for higher state investment in long-delayed infrastructure projects, as well as signs of recovery in the corporate and banking sectors.

The stock benchmark has been declining for most of this year and is still down 5 percent year-to-date because of political tensions within the ruling elite as well as financial trouble at a number of local companies.

But over the last two months, a number of companies have announced deals with creditors to settle their debts, including Al Madina for Finance and Investment Co., Al Mal Investment and COAST Investment and Development.

According to a report in Kuwait's Argaam newspaper, listed Kuwaiti companies have settled a total of 139.6 million dinars ($495 million) in debts with creditors this year.

Also, Kuwait's banks are expected to perform much better than last year. Analysts surveyed by Reuters forecast on average that the profit of the country's largest lender, National Bank of Kuwait, will surge 59 percent in the second quarter. The quarterly profit of smaller Burgan Bank is expected to jump 43 percent.

Markets in Dubai and Abu Dhabi moved very little as trading volumes fell on both bourses in a typical Ramadan lull.

Dubai's largest listed developer, Emaar Properties, pulled back 1.4 percent after jumping 3.8 percent in the last session; it offset gains made by smaller stocks.

The market index edged up just 0.1 percent to 4,580 points after meeting resistance around the 4,600-point level, which is close to the lows seen in May and early June.

Shares in Abu Dhabi's Dana Gas jumped 4.3 percent after the company said an arbitration tribunal in London had awarded it the right to receive some outstanding payments from the government of Iraq's Kurdistan region.

But shares in another local firm with assets in Iraq, Abu Dhabi National Energy Company, dropped 3.4 percent as heavy fighting took place less than 50 miles (80 km) from Baghdad and Iraq's parliament failed to move towards forming a new government.

Qatar's benchmark was down 0.3 percent as its four-day rally lost steam and trading volumes fell. Industries Qatar was the main drag, falling 1.6 percent.

In Egypt, shares in Bisco Misr jumped their 10 percent daily limit after the snack maker said Abraaj Investment Management had made an approach to buy at least a 51 percent stake in it. However, the Egyptian index slipped 0.7 percent on broad-based profit-taking.