Major stock markets in the Gulf rose on Monday, tracking oil prices and Asian shares higher, with the Dubai index on course to gain for a third session.

Saudi Arabia's benchmark index added 0.4%, led by a 0.6% rise in Al Rajhi Bank and a 0.7% increase in oil behemoth Saudi Aramco.

Crude prices, a key catalyst for the Gulf's financial markets, extended gains propped up by a weaker dollar and tight supplies that offset concerns about recession and the prospect of widespread COVID-19 lockdowns in China again reducing fuel demand.

Last week, Brent crude and U.S. West Texas Intermediate (WTI) crude posted their biggest weekly drops in about a month on fears of a recession that will hit oil demand. Mass COVID testing exercises continued in parts of China this week, raising oil demand concerns at the world's second-largest oil consumer.

Dubai's main share index added 0.5%, with blue-chip developer Emaar Properties advancing 1.7% and diversified investment group Dubai Investments leaping 2.3%.

However, emirati supermarket chain Union Coop plunged more than 11% in its debut trade.

Union Coop, which operates 23 branches, is the largest consumer cooperative in the UAE, according to its website.

In Abu Dhabi, the index edged 0.1% higher, helped by a 0.3% increase in conglomerate International Holding .

Separately, the United Arab Emirates on Sunday launched a 3 billion UAE dirham ($816.84 million) fund to support its space programme and a new initiative to develop radar satellites, the Gulf country's president Sheikh Mohammed bin Zayed al-Nahyan said on Twitter.

The Qatari index rose 0.6%, driven by a 10% jump in Qatar Navigation (Milaha) after the shipping conglomerate won engineering, procurement, construction and installation (EPCI) contract from QatarEnergy valued at more than 1.4 billion riyals ($384.62 million).

($1 = 3.6729 UAE dirham) ($1 = 3.6400 Qatar riyals)

(Reporting by Ateeq Shariff in Bengaluru)