DUBAI - Kuwaiti stocks rose nearly 0.8 percent in early trade on Tuesday, helped by expectations that its inclusion in the FTSE Russell emerging market index will trigger more foreign fund flows.

The first phase of its entry to the index began on Monday and the second stage will be on Dec. 24.

"There's more activity due to Kuwait's inclusion in the emerging market index," said Marie Salem, director of capital markets at FFA Dubai.

There is more value in Kuwaiti companies and their potential will be harnessed by the entry of more foreign funds to the market, she said.

Arqaam Capital said in a report this month that in the wake of the index inclusion, $1 billion of passive inflows are expected.

Financial stocks were gaining ground in early trade, with National Bank of Kuwait and Kuwait Finance House both up more than 1 percent each.

The premier index has already gained over 11 percent year to date. Investment activity increased this quarter ahead of the inclusion in the index, boosting the market by nearly 8.5 percent.

Saudi stocks also opened higher, gaining 0.6 percent in early trade, helped by a jump in oil prices to a fresh four-year high. Market favourite Al Rajhi Bank rose 1.3 percent and petrochemicals giant Saudi Basic Industries was up 1.1 percent. In Dubai, the index was flat, while Qatar index was 0.3 percent lower, weighed down by a 1.7 percent drop in Qatar Insurance Co and a 0.4 percent decline in Industries Qatar.

(Reporting by Saeed Azhar; Editing by Kirsten Donovan) ((saeed.azhar@thomsonreuters.com; +971521047569; Reuters Messaging: saeed.azhar.reuters.com@reuters.net))