United Arab Emirates bourses were also boosted by a top official saying Dubai World's debt restructuring was going well.
Qatar's index climbed 3.7 percent in its largest gain for eight weeks and Saudi Arabia's Tadawul All-Share Index (TASI) rose for a second day as a Greek bailout soothed panicking investors.
The Greece rescue package sent world stocks and oil prices soaring, but questions remain about whether Europe's weakest economies will wilt under debts.
TASI climbed 1.3 percent, taking its gains to 3.8 percent in two days since plunging 4.4 percent on Saturday, its biggest loss for 14 months.
The market recovered slowly from losses at the beginning of the week, the Financial Transaction House (FTH) said in its daily market commentary.
All sectors posted gains on Monday ranging from 0.42 percent in the Banks and Financial Services sector to 3.11 percent in the Insurance sector. Overall market breadth remained positive with 129 advancing companies against 7 decliners, recording an AD ratio of 18.43, FTH said.
"There was panic selling, but Greece's problems wouldn't have an effect on the Saudi economy in the short term, so the market should not have fallen so much," said Saleh Al-Onazi, a vice president at Swicorp in Riyadh. "The Greece issue was a good reason for a healthy correction."
Dubai's index climbed 1.6 percent after the country's central bank governor offered an upbeat outlook for indebted Dubai World, adding that no more major corporate restructurings were expected.
Sultan Nasser Al-Suweidi's remarks came after Financial Times said units of Dubai Holding, a state-controlled group like Dubai World, had hired advisers ahead of a potential plan to restructure billion-dollar debts.
This boosted sentiment, said Hesham Bakry of Prime Emirates brokerage, as "the market was worried about the uncertainty over the Dubai World debt situation, whether there will be an agreement and what this agreement will look like."
Dubai's Arabtec rose 1.6 percent to 2.50 dirhams after the builder reported a 17 percent drop in first-quarter profit as an analyst offered an upbeat outlook.
-- With input from agencies
