* Zain Saudi jumps after profit rises
* Saudi's Al Khaleej surges on contract win
* Abu Dhabi pares some losses after hitting 2-month low
* Recent events in Saudi unlikely to derail upgrade of stock market - note
By Muvija M
Oct 29 (Reuters) - Saudi Arabia's stock index closed higher on Monday, aided by strong corporate earnings, while Abu Dhabi recovered some of its losses after opening at its lowest in two months.
Stock exchange data on Sunday showed that foreigners sold a net 2.34 billion riyals ($623.85 million) in the Saudi stock market for the week ending Oct. 25, but the bourse was supported by local institutions, which bought 8.06 billion riyals worth of shares.
Foreign ownership is now down to 1.65 percent, after stripping out strategic shareholders, from 1.94 percent the week before and 2.17 percent in the week ending Oct. 11, Arqaam Capital said in a note on Monday.
The research note said recent events were unlikely to derail an upgrade of the stock market by index providers FTSE Russell and MSCI.
The Saudi stock exchange data also indicated that foreign selling had slowed from the previous week. It hit a record then investors were spooked by the killing of Saudi journalist Jamal Khashoggi.
The main index rose 0.6 percent, supported by gains in real estate and petrochemical shares.
Mobile telecommunication firm Zain Saudi jumped 6.9 percent after reporting a rise in its quarterly profit.
Saudi Industrial Investment Group rose 3.4 percent after a 41.1 percent surge in quarterly profit after tax to 319 million riyals ($85.05 million).
Al Khaleej Training and Education Co recorded its biggest intra-day gain since 2011, closing 9.9 percent higher after winning a 18 million riyals project.
Qatar's blue-chip index was up 0.5 percent, erasing earlier losses, buoyed by gains across bank stocks.
The region's Commercial Bank rose 2.3 percent while Doha Bank gained 1.6 percent.
But Gulf International Services dived 4.7 percent despite reporting a jump in its nine-month profit on Sunday.
The Abu Dhabi index fell 0.5 percent, after touching a two-month low earlier in the session. A 1.4 percent drop in First Abu Dhabi Bank and a 9.9 percent slide in National Corp for Tourism and Hotels led the decline.
Real estate company Rak Properties shed 3.4 percent after posting a loss compared with a year-ago profit in its third quarter.
The Dubai index recorded a 0.4 percent loss, as real estate stocks Emaar Properties lost 2.5 percent and second-tier real estate developer Deyaar fell 2.2 percent.
The Egyptian blue-chip bourse gained 0.7 percent, led by a 2.1 percent rise in tobacco firm Eastern Co.
Raya Holding for Financial Investment, which is not part of the index, surged 9.9 percent after Egyptian regulator mandated its Chairman and related group to make a buyout offer for the company.
SAUDI ARABIA * The index was up 0.6 percent at 7,848 points. DUBAI * The index was down 0.4 percent at 2,715 points. ABU DHABI * The index was down 0.5 percent at 4,872 points. QATAR * The index was up 0.5 percent at 10,192 points. KUWAIT * The index was down 0.02 percent at 5,217 points. BAHRAIN * The index was down 0.3 percent at 1,315 points. OMAN * The index was down 0.6 percent at 4,429 points. EGYPT * The index was up 0.7 percent at 13,074 points. ($1 = 3.7509 riyals) (Reporting by Muvija M in Bengaluru; additional reporting by Saeed Azhar in Dubai, editing by Ed Osmond)