Most Gulf markets recovered from earlier losses on Monday to close higher, with Saudi lifted by financial shares and Kuwait rising for the eighth straight session following MSCI's decision to include the country in its main emerging markets index.

The Saudi index gained 0.2% with Al Rajhi Bank 1120.SE rising 0.6% and Riyad Bank adding 1.7% after its board proposed a higher dividend for the first-half of the year.

The market is up nearly 13% so far this year in a rally led by foreign investors.

Total ownership of Saudi stocks by foreign investors increased to 7.47% by June 30, up from 4.67% at the end of December, stock exchange data shows, reflecting increased active and passive fund flows this year.

Advanced Petrochemical 2330.SE fell 0.9% after it posted an over 24% decline in second-quarter profit, which it blamed on a drop in sales volume and product prices. 

Kuwait's index closed 0.2% higher. The index has surged since MSCI said it would move Kuwaiti equities to its main emerging market index in 2020, a move that could trigger billions of dollars of inflows. 

Kuwait has outperformed its Gulf peers in anticipation of the MSCI move, gaining nearly 26% year-to-date.

Middle Eastern funds plan to continue increasing investments in Kuwait over the next three months, a Reuters poll found earlier this week. 

The Abu Dhabi index added 0.2% with Abu Dhabi Commercial Bank gaining 1.3%.

However, Bank Of Sharjah plunged 3.9% after reporting a 38% slump in first-quarter profit.

The Dubai index increased 0.3% led by a 2.5% jump in its largest listed developer Emaar Properties.

In Egypt, the index gained 0.2% as Egypt Kuwait Holding leapt 5.1% and Talat Mostafa Group Holding  was up 1.6%.

In Qatar, the index declined 0.7% with Qatar National Bank losing 1.5% and Commercial Bank  was down 1.9%.

(Reporting by Ateeq Shariff in Bengaluru; Editing by Kirsten Donovan) ((; +918067497129;))