DUBAI, June 27 (Reuters) - Major stock markets in the Gulf rebounded in early trade on Monday, recovering from the immediate aftermath of Britain's vote to leave the European Union, as local retail investors and some institutions scooped up shares on dips.

Dubai's index .DFGMI , which had sunk 3.3 percent on Sunday in its initial reaction to the vote, rose 1.0 percent in the first hour on Monday with over nine-tenths of shares advancing.

Small and mid-sized shares favoured by local retail investors were the most traded with Islamic insurer Dar Al Takaful DTKF.DU rocketing its 15 percent daily limit.

In Abu Dhabi the index .ADI added 0.4 percent, after dropping 1.9 percent on Sunday. Gainers doubled the number of losers.

Finance House FH.AD rose 2.9 percent in very thin trade after the company said it had received approval from the capital market regulator to buy back its shares. Details were not provided.

Riyadh's benchmark .TASI added 0.7 percent in its first 15 minutes of trade. On Sunday the index had closed 1.1 percent lower at 6,479 points but bounced from an intra-day low of 6,257 points. The insurance sub-sector .SINSI gained 1.3 percent as local day traders bought shares.

Arab National Bank 1080.SE added 1.3 percent after it proposed paying a cash dividend of 0.45 riyal per share for the first half of 2016; that would be the same as in the corresponding period of last year.

Other banking shares were also strong, with the sub-index .TBFSI advancing 1.0 percent.

(Reporting by Celine Aswad; Editing by Andrew Torchia) ((celine.aswad@thomsonreuters.com; +971 4 4536886; Reuters Messaging: celine.aswad.thomsonreuters.com@reuters.net))