* Qatar National Bank, Industries Qatar surge
* Retail flows increase in Saudi ahead of MSCI decision
* Emaar supports Dubai shares
* Etisalat's 2 pct gain lifts Abu Dhabi
By Saeed Azhar
DUBAI, May 14 (Reuters) - Qatar stocks rose more than one percent on Monday, leading among Gulf markets, as investors bet that index-compiler MSCI will increase weightings for some of the country's top blue-chip companies in its emerging market index review.
Banking stocks drove Saudi shares higher as investors also hoped MSCI will upgrade Riyadh next month to emerging market status, following FTSE Russell's similar decision in March.
Qatari stocks ended the day 1.3 percent higher, fuelled by 3.4 percent gains in Qatar National Bank and a 2.7 percent rise in Industries Qatar.
The two market heavyweights are among Qatari companies which have raised their foreign ownership limits to 49 percent from 25 percent, in an attempt to boost the weight of their stocks in emerging market indexes.
The results of MSCI's semi-annual index review will be announced late on Monday and the changes will take effect at the end of this month.
The Saudi index closed 0.6 percent higher at 8,071 points, with Al Rajhi Bank - the kingdom's second largest bank by assets and one of the main beneficiaries of a huge inflow of foreign money this year - up 1.3 percent.
Samba Financial Group gained 1.7 percent.
"We expect Saudi to do well in the run up to the MSCI announcement – the index closing above the 8000 mark is a healthy sign and we see retail as well as the opportunistic foreign investors to come in," said Vrajesh Bhandari, a portfolio manager at Dubai-based Al Mal Capital.
"Banks reported good set of numbers. Going forward, we expect the sector to witness better loan growth post summer as well, benefiting from the substantial base of non-interest bearing deposits in this context of higher interest rates."
In Abu Dhabi, telecommunications firm Etisalat rose 2.2 percent, helping the stock index to close 0.5 percent higher.
Investors saw a bargain in the stock after it lagged the index this year on concerns over earnings growth. It reported a flat first quarter net profit last month amid higher expenses and impairments. The stock is still down 6.6 percent so far this year.
Dana Gas dropped 2.8 percent, giving up much of its gains a day earlier when it surged 3.9 percent after announcing that it had struck a deal with creditors on restructuring $700 million of sukuk. This will possibly bring to an end a nearly year-long legal row that spooked investors in Islamic finance.
In Dubai, the index closed 0.5 percent up, helped by Emaar Properties which rose 1.2 percent. Larger gains were prevented by profit-taking in lender Emirates NBD which closed almost 2 percent lower.
Despite Monday's losses, Emirates NBD is up 22 percent so far this year, outperforming a weak stock market that has been weighed down by property stocks.
* The index rose 0.6 percent to 8,071 points.
* The index rose 0.5 percent to 2,905 points.
* The index rose 0.5 percent to 4,447 points.
* The index climbed 1.3 percent to 8,934 points.
* The index fell 0.5 percent to 4,765 points.
* The index was flat at 1,272 points.
* The index was flat at 4,690 points.
* The index fell 1.2 percent to 16,984 points. (editing by David Stamp)