* Dubai leads UAE markets rise
* Emaar supports index after MSCI decision on stock
* Qatar sheds earlier gains
* Saudi down but sentiment remains positive
RIYADH, May 15 (Reuters) - Dubai led a rise in United Arab Emirates (UAE) markets on Tuesday, closing more than 1 percent up, backed by solid gains in blue chips, while Saudi and Qatar reversed earlier gains and closed on a slightly negative note.
The Dubai index closed 1.1 percent up on a 7 percent jump by Dubai Investments which rebounded after hitting a two-year low last week.
Heavyweight Emaar Properties offered major support, rising 2.6 percent and maintaining an uptrend for a second day from a two-year low.
Its affiliate Emaar Development gained 1.5 percent after MSCI decided overnight to add the stock to its United Arab Emirates index at the end of this month; the decision had been widely expected.
Builder Drake & Scull jumped 5.3 percent after swinging to a small first-quarter net profit from a huge year-earlier loss.
DAMAC Properties reversed earlier losses that neared 6 percent and closed 0.4 up. The company posted a 45 percent drop in first-quarter profit, missing analysts' estimates.
The Abu Dhabi index rose 0.5 percent, backed mainly by heavyweight First Abu Dhabi Bank, which rose 0.9 percent.
Aldar Properties closed 1 percent up. The largest developer in Abu Dhabi reported a 5 percent rise in quarterly profit, beating estimates.
The Saudi index lose 0.4 percent, dragged down by property developer Jabal Omar and the kingdom's largest food products company Savola which fell 2.6 percent and 4.1 percent respectively.
Aided by strong oil prices, blue-chip petrochemical producer SABIC gained 0.6 percent.
"The index has recovered from its recent correction and remains solid above 8,000 points, backed by upbeat sentiment as investors await MSCI's announcement over the next two to three weeks," said Muhammad Faisal Potrik, head of research at Riyad Capital. MSCI will announce in June whether it will upgrade Saudi Arabia to emerging market status.
"We expect banks and petrochemicals to lead market movement over the next few weeks, although activity will usually be lower during Ramadan," he added. The holy month of Ramadan will start this week.
Saudi British Bank (SABB) and Alawwal Bank asked the bourse to suspend trading in their shares pending an announcement. They have been conducting merger talks.
The Qatari index, which rose earlier buoyed by MSCI's decision to increase the weightings of several blue chips, reversed its gains and fell 0.1 percent.
Industries Qatar QA> was the main drag, losing 3.2 percent.
Qatar Gas Transport fell 6.3 percent after MSCI downgraded the stock to its small cap index; Arqaam Capital estimated there was only a 10 percent chance of that happening.
Qatar National Bank and Qatar Islamic Bank rose 2.4 and 2.5 percent, respectively.
In Egypt, the main index closed flat at 16,986 points. A Reuters poll showed on Tuesday Egypt's central bank will likely keep its key interest rates unchanged at its meeting on Thursday, as inflation rose slightly for the first time in eight months.
Property Developer Palm Hills jumped 1.3 percent after announcing its net profit rose to 224.2 million Egyptian pounds ($12.60 million) from 212.3 million a year earlier.
* The index lost 0.4 percent to 8,039 points.
* The index rose 1.1 percent to 2,937 points.
* The index added 0.5 percent to 4,471 points.
* The index lost 0.1 percent to 8,922 points.
* The index rose 0.3 percent to 4,781 points.
* The index rose 0.2 percent to at 1,274 points.
* The index fell 0. 1 percent to 4,685 points.
* The index was flat at 16,986 points. ($1 = 17.7900 Egyptian pounds) (Reporting by Marwa Rashad; Editing by Davide Barbuscia)