Saudi Arabian petrochemical and banking stocks led a rally across the bourse as investors snapped up attractive valuations.

Most other Gulf markets made moderate gains as investors awaited the end of the Islamic fasting month of Ramadan and the onset of the third quarter earnings season.

Oman's benchmark bucked the upward trend, reversing gains it made from Sunday, although a rally towards the end of the session suggested foreign and retail selling may be over.

'I think the negative sentiment continues to prevail on GCC markets and at current levels sellers are unwilling to get rid of their stocks after reaching levels not seen for three years,' said Rami Sidani, head of Mena investment at Shroders Investment Management.

In Dubai, shares in Emaar Properties inched higher after closing at their lowest levels in nearly 3-1/2 years on Sunday, lifting the index marginally.

The kingdom's index climbed 4.27 per cent higher to 7,907 points, ending higher for the first time in five sessions. The benchmark fell more than 5 percent on Saturday as investors sold on news of new bourse structures.

'It was an unjustified decline and eventually the fundamentals override,' said Hisham Tuffaha, head of research at Riyadh-based Bakheet Investment Group.

'The sharp decline was very attractive to high net worth individuals and fund managers.' Saudi Basic Industries Corporation ended 6.94 percent higher at 115.5 riyals ($30.80). Al-Rajhi Bank rises 5.26 percent.

Bahrain's index closed 0.53 per cent higher at 2,614 points, with banks leading gains. Ithmaar Bank, which closed 8.96 per cent lower on Sunday, gained 6.56 per cent and Salam Bank rose 4.52 percent-Reuters