Vodafone jumped 4.1 percent after rival Qatar Telecom (Qtel) was ordered by the country's regulator to close its Virgin Mobile Services.
Qtel rose 1.4 percent.
"It's a marginal victory for Vodafone Qatar, and a marginal loss for Qtel. It's a small market, and Qtel is still making good returns in that market," said Martin Mabbutt, telecom analyst at Nomura based in London.
Vodafone had long argued Qtel's launch of Virgin-branded pre-paid services constituted a third service provider and violated the terms of Vodafone's license.
Qatar's benchmark gained 0.8 percent to 8,184 points.
Traders say attractive valuations are drawing back foreign investors following recent declines.
"We are seeing new foreign interest in some names," like Qatar Navigation, Masraf Al-Rayan and Gulf International Services, said a Doha-based trader who asked not to be identified.
Industries Qatar, the second largest stock on the index by market value, gained 2.4 percent and Barwa Real Estate rose 0.5 percent.
Saudi Arabia petrochemicals stocks tracked declines in oil prices, dragging the main share index down 0.7 percent to a four-week low. The Tadawul All-Share Index (TASI) closed down at 6,614.13 points on Tuesday.
Petrochemical and banking, the Saudi market's two largest sectors, fell, with bellwether stocks Saudi Basic Industries Corp (SABIC) and Al-Rajhi Bank down 0.7 and 1 percent respectively.
Sahara Petrochemical Co. fell 2.3 percent after rising 5.2 percent on Monday.
Advanced Petrochemical Co. also slipped, down 2 percent.
Abu Dhabi Commercial Bank rose 3.6 percent, extending gains to hit a fresh 31-month closing high. The lender said on Monday it will proceed with the auction of its stake in Malaysian bank RHB.
Other banks were also up, with Abu Dhabi Islamic Bank up 2.4 percent and Union National Bank gaining 1.8 percent.
"Provisioning in coming quarters would be less than what we expected with better earnings. That's encouraging the buying in the banking sector, especially from institutional (investors)," said Samer Al-Jaouni, general manager of Middle East Financial Brokerage Co.
Abu Dhabi's index rose 0.5 percent to 2,690 points — its highest close since May 5.
The Omani index edged up 0.2 percent to 6,053 points.
The Dubai index climbed 0.09 percent to 1,565 points.
The Kuwaiti measure rose 0.02 percent to 6,314 points.
