Oman's index rises more than 3 per cent in early trade, extending the previous session's gains, on year-end positioning on the last day of trading before the bourse closes to mark the new year.

'The market is seeing a continuation of what we saw yesterday...there is strong interest from foreign institutions, which are buying to close their positions before the end of the year,' said Adel Nasr, local brokerage manager at United Securities in Muscat.

Bank Muscat leads gains, surging 6.52 per cent. The index gains 3.7 per cent to 5.404 points.

A jump in oil prices after Israel's air raids on the Gaza Strip is not impacting shares in Oman, Nasr said.

'If prices continue to rise for another day, then this would have an impact, but not just on one day,' he said.

The Omani bourse will be closed Tuesday to mark the Islamic new year and will remain closed til January 4.

Nymex crude is up 2.36 per cent at $38.60 a barrel.

Markets in the United Arab Emirates trade almost unchanged.   Dubai edges down 0.01 per cent at 1,568 points, dragged lower by Dubai Islamic Bank which declines 3.13 per cent. Abu Dhabi's benchmark rises 0.8 per cent to 2,300 points.

Gulf Arab markets are expected to edge lower on Monday amid low volumes with some bourses closed for the Islamic New Year.

'I expect we'll see the same kind of trend as last week, trading sideways to slightly lower amid low volumes because of the Islamic New Year,' said Matthew Wakeman, director of cash and equity linked trading at EFG-Hermes.

Markets may also take their cue from Asia, where stocks decline for the second day, albeit also in low volumes before the New Year holidays.

Bourses in Kuwait and Bahrain are closed to mark the start of the new Islamic year.-Reuters