MIDEAST STOCKS-Dubai lifted by real estate as Gulf gains on global rally

* Dubai enjoys best day since June 2017

* All property firms rise in Dubai

* 10 of 11 Saudi banks rise

* Banks strong in Qatar

* Egypt's Orascom continues to rise on possible investment in North Korea

Feb 20 (Reuters) - Dubai's main stock index closed at a two-and-half-month high on Wednesday after strong fourth-quarter earnings from real estate companies last week triggered six days of gains. All major Gulf bourses were driven higher by a wider stocks rally on hopes of progress in trade talks between the United States and China. Dubai's index ended 2.6 percent higher at 2,632 points, its highest since December 2018, led by Emaar Properties , Emaar Malls and Emaar Development , which have risen in recent sessions. The emirate's biggest listed developer surged 6.2 percent in its heaviest trading volume since Dec. 2017. Emaar Malls jumped 6.1 percent and Emaar Development rose 3.1 percent. Other property stocks such as DAMAC Properties and Arabtec gained 4.8 percent and 5 percent respectively. The Dubai index fell more than 25 percent in 2018 to become the world's worst-performing major stock market in local currency terms, led by declining real estate stocks as Dubai property prices fell from their mid-2014 peak. Nishit Lakhotia, head of research at SICO Bank, said the rises were possibly driven by short covering, especially on stocks that have dragged on the index such as Emaar Malls and DAMAC Properties. "We believe there is a certain level of risk appetite getting built into fund managers to buy the high beta names with strong yield but have been over sold," Lakhotia said, adding that the UAE market was the only one within the GCC offering high yield, value and also earnings growth. Saudi Arabia's index was up 0.6 percent. Banks, which were hard hit in the last three sessions, led the gains with 10 of the market's 11 banks rising. Samba Financial Group added 3.2 percent and Riyad Bank gained 2.3 percent. The Qatari index rose 1 percent after a recent spate of selling. The Gulf's best stock market last year, Qatar shares are down 6.4 percent so far this month. Qatar Islamic Bank was up 2.5 percent while heavyweight Industries Qatar climbed 1.6 percent. The Abu Dhabi index was also up 0.5 percent with Abu Dhabi Commercial Bank surging 5.9 percent. Egypt's blue-chip index gained 0.4 percent with Orascom Investment Holding closing 5 percent higher. The stock has risen recently after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and U.S. President Donald Trump later this month was successful

SAUDI The index rose 0.6 pct to 8,567 points

ARABIA

DUBAI The index rose 2.6 pct to 2,632 points ABU DHABI The index rose 0.5 pct to 5,061 points Qatar The index rose 1 pct to 10,078 points EGYPT The index rose 0.4 pct to 15,214 points KUWAIT The index rose 0.4 pct to 5,481 points BAHRAIN The index rose 0.9 pct to 1,405 points OMAN The index was flat at 4,054 points

(Reporting by Shakeel Ahmad in Bengaluru; Editing by Alexander Smith)