Saudi Arabia's construction-related stocks jumped on Monday in the hope of higher government spending on housing in next year's state budget, lifting the bourse to a 21-week high, while other Gulf markets were mixed.
Saudi Steel Pipes and Arabian Pipes surged 8.3 and 9.7 per cent respectively. Construction firm Al Khodari climbed 5 per cent and Yamamah Saudi Cement gained 2.8 per cent.
The kingdom's index advanced 0.5 per cent, in turnover of $5.4 billion.
After the market closed, the finance ministry said it planned to spend 690 billion riyals ($184 billion) in 2012, cutting expenditure from an estimated 804 billion riyals this year, when social spending was ramped up to ensure political stability. The ministry said it had set aside 250 billion riyals from the 2011 budget surplus to fund one of the special projects, the construction of 500,000 homes.
"We need at least $7.5 billion (in daily trade) to make sure the gains are solid, reflecting injection of fresh money," said Mohammad Omran, a financial analyst based in Riyadh. "I don't think the market has enough time to recover the losses of this year."
Yanbu Cement Co gained 4.3 per cent after saying it has restarted three of four production lines almost two months after a fuel shortage forced the firm to halt operations.
National Company for Glass Industries advanced 4.6 per cent after proposing a cash dividend of 2.25 riyals per share for 2011.
Shares in Saudi Chemical declined 4.8 per cent to a 12-day low as it went ex-dividend, with a cash dividend of 2 riyals per share for the third-quarter.
In Qatar, the index slipped 0.4 per cent from Sunday's 37-week high in a session of light profit-taking as volumes fell to their lowest in 12 days.
Heavyweight Qatar National Bank shed 0.7 per cent, while Masraf Al Rayan and Commercial Bank of Qatar dipped 0.2 per cent and 0.1 per cent.
"Investors are waiting for the new year to add risk and build positions," said Ali Al Enin, equity trader at Qatar National Bank. "They are also looking for more cues from economic data from U.S."
Doha's market is the only regional bourse recording year-to-date gains, at 1.2 per cent.
Elsewhere, Abu Dhabi's Aldar Properties fell 2.4 per cent to 82 fils after saying its board would discuss asset sales at a Dec. 28 meeting.
"I don't think this should be surprising -- there was an assumption that Aldar would sell over 4 billion dirhams worth of land in 2011, and so far there has been 2.6 billion," said a real estate analyst who asked not to be identified.
"There would be a concern if they weren't doing something. To a large extent, the company is paralysed by the state of its balance sheet," the analyst added.
Its shares slumped to a record low last Wednesday amid talk it might delist from the exchange, which was dismissed by management.
Food firm Agthia Group climbed 3.6 per cent after acquiring Pelit Su, a Turkey-based spring water company.
Abu Dhabi's index ended 0.09 per cent higher, moving sideways from Wednesday's 33-month closing low.