(Fixes typo in headline)
* Kuwait's NBK, Zain gain on MSCI index reshuffle expectations
* Kuwait likely to get fund inflows once UAE, Qatar are upgraded
* Large-caps, property stocks rise in Egypt
* Dubai's Emaar retreats, but Arabtec rallies after Q4 results
* Other markets edge lower
By Olzhas Auyezov
DUBAI, March 19 Kuwait blue-chip stocks rose on Wednesday on expectations they would soon have a larger weighting on MSCI's frontier market index, while Egyptian investors sought large-caps that had lagged recent rallies.
These trends helped these two markets outperform an otherwise soft region.
National Bank of Kuwait (NBK) and mobile operator Zain, gained 3.2 percent and 1.5 percent, dominating Kuwait local trading as the index rose 1.1 percent.
Analysts believe Kuwaiti blue chips will have a bigger weighting on MSCI's frontier market index and consequently will attract more foreign investors when the United Arab Emirates and Qatar are upgraded to the emerging markets in May.
Trading data indicated larger than usual deals.
"This is institutional flow and institutional build-up," said Fouad Darwish, head of brokerage at Global Investment House.
NBK is perceived as paying generous dividends and also benefits from expectations its asset quality will improve, he added.
Egypt's bourse climbed 1.1 percent, with the major gainers including Global Telecom and property firm 6th October Development and Investment Co, which rose 3 and 10 percent respectively.
Local retail investors have reacted to a pick-up in property demand and are looking for large-caps that have so far lagged behind the market, said Ahmed Abutaleb from Pharos Securities in Cairo.
Egypt's bourse, which has risen 22 percent in 2014, is second only to Dubai in terms of gains this year. Dubai's bourse closed 0.5 percent higher, bringing year-to-date gains to 26.3 percent.
Emaar Properties fell 0.5 percent to end a three-day rally, but contractor Arabtec Holding jumped 5.1 percent after its fourth-quarter profit tripled to beat estimates.
In Abu Dhabi, Finance House surged 14 percent on higher-than-usual volume after announcing plans to buy back up to 10 percent of its shares.
* The index rose 1.1 percent to 7,536 points.
* The index climbed 1.1 percent to 8,287 points.
* The index gained 0.5 percent to 4,256 points.
* The index slid 0.2 percent to 4,836 points.
* The index eased 0.3 percent to 11,388 points.
* The index slipped 0.1 percent to 9,319 points.
* The index slid 0.3 percent to 7,000 points.
* The index fell 0.2 percent to 1,372 points. (Editing by Matt Smith)