"We expect Saudi Arabia to continue its upward trend until at least the MSCI effective date May 28," added Vrajesh. "Thereafter, investors need to be selective & follow a bottom up approach. Overall, we find better value in UAE & Egypt."
MSCI last week said it would include MSCI Saudi Arabia in its emerging-markets index, effective May 28, a move that could draw billions of dollars into the market.
Saudi International Petrochemical closed 3.4% higher. The firm completed the merger of equals with Sahara Petrochemical, which delisted on May 20.
Qatar's index was down 2%, with 17 of its 20 stocks sliding.
Middle East's largest lender, Qatar National Bank, dropped 2.4%, while Mesaieed Petrochemical Holding plunged 10%, snapping a six-day winning streak triggered by the stock inclusion in MSCI's index.
Egypt's blue-chip index, gained 1.7% as most of its stocks rose, with Market heavyweight Commercial International Bank gaining 0.9%.
El Sewedy Electric jumped 5.9% after it partnered with General Authority For Suez Canal Economic Zone to establish a new company with issued capital of 1 billion Egyptian pounds ($58.82 million), in which the firm will own 49%.
Abu Dhabi's index closed 1.1% higher, led by a 1.3% increase in the country's largest lender, First Abu Dhabi Bank .
Dana Gas jumped 4.1% after the energy firm said it had started drilling operations at Merak-1 well, offshore Egypt.
National Marine Dredging soared 13.9% after last week reporting a higher first-quarter earnings.
The Dubai index rose 1% as all but one of its real estate stocks rose.
Emaar Properties, Dubai's largest listed-developer, increased 2.9% while its units Emaar Malls and Emaar Development were up 2.3 and 3% respectively.
The United Arab Emirates said on Tuesday that it will grant 6,800 foreign investors permanent residency under a new "Golden Card" system after they invested a combined 100 billion dirhams ($27.23 billion) in the Gulf state.
National Cement Company was up 1.7% after news it had bought ARM Cement's Kenyan assets for $50 million.
Arabtec Holding rebounded 2.1%, snapping four straight sessions of losses on weak first-quarter earnings.
($1 = 3.7500 riyals)
($1 = 3.6730 UAE dirham)
($1 = 17.0000 Egyptian pounds)
(Reporting by Ateeq Shariff in Bengaluru Editing by Frances Kerry) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))