Saudi Arabia's Tadawul climbed to its highest point in a month as sweeping government stimulus measures offered a boon to investors.
The kingdom's market rose more than 5 per cent at the opening bell, the first day of trading after being closed on Saturday for a public holiday.
It was trading 4 per cent higher to 6,343.79 points.
A spate of new measures are expected to be introduced to Saudi Arabia including a minimum wage and unemployment benefit for Saudi nationals.
Other markets in the region paced the rise in the Arab world's largest stock market.
The Dubai Financial Market advanced 2.6 per cent to 1509.82 points with stocks rising to highs not seen for several months, and Abu Dhabi's index added 0.7 per cent to 2602.26 points.
Qatar's QE Index added 2.6 per cent to 8395.02; and Oman's stock market advanced 1.3 per cent to 6353.64 points.
But Bahraini shares fell 1.6 per cent to 1391.81 points as volumes remained thin, while Kuwait's market slipped 0.2 per cent to 6251.60 points.
Kuwaiti telecoms company Zain fell to its lowest intraday point in two weeks after Etisalat backed out of a $12 billion deal to buy a majority stake in the company. It closed 4.4 per cent down.
Etisalat, the Middle East's biggest telecoms company by market value ended talks to buy a 46 per cent stake in Zain, citing ongoing political unrest and disagreement among shareholders as its main reason.
Etisalat offered $12 billion in September to buy most of Zain.
The reopening of Egypt's benchmark stock exchange, the EGX 100 will also be under the radar of investors this week. The exchange has been closed since January 27 but has to open before the end of this week before it is removed from MSCI's emerging market index, which is tracked by thousands of fund managers internationally. It has fallen nearly 21 per cent since the beginning of the year.