Dubai's stock market rose sharply on Wednesday, buoyed by financial and real estate shares, to lead gains in most major Gulf bourses.

Dubai's index closed 1.8% higher with all its real estate shares gaining. Blue-chip developer Emaar Properties added 2.6% and market heavyweight lender Emirates NBD  was up 2.8%.

Locals and foreigners bought selectively on the Dubai Financial Market, especially in the real estate and construction space, said Harsh Oza, vice president for research at Shuaa Capital.

"The sector has underperformed the broader market over the past one month. The newly announced residency visa initiative by UAE seems to be the factor behind the real estate stock rally," he added.

The United Arab Emirates said on Tuesday that it will grant 6,800 foreign investors permanent residency under a new "Golden Card" system after they invested a combined 100 billion dirhams ($27.23 billion) in the Gulf state. 

Arabtec Holding continued rebounding and jumped 5.6% after on Tuesday it snapped four straight sessions of losses on weak first-quarter earnings.

Saudi's index increased 0.5%. Dar Al Arkan Real Estate Development soared 7.9% and Sahara International Petrochemical 2310.SE surged 5.6%, extending its gains from Tuesday when it completed the merger of equals with Sahara Petrochemical, which delisted on May 20.

However, Saudi Arabian mall operator Arabian Centres fell 3.9% to 25 riyals from its initial public offer price of 26 riyals.

Arabian Centres' share sale, which raised 2.47 billion riyals ($658.65 million), was the kingdom's third biggest since Saudi lender National Commercial Bank raised $6 billion in 2014, according to Refinitiv data. 

Qatar's index gained 0.6% with blue-chip petrochemical maker Industries Qatar  trading 1.4% higher.

Gulf International Services hiked 5.1% after its unit Al Koot Insurance And Reinsurance signed a two-year deal with Qatar Airways to provide health care services.

The Abu Dhabi index slipped 0.7% led by a 1.7% drop in First Abu Dhabi Bank, the country's largest lender.

The lender has mostly fallen in recent sessions after MSCI decided to maintain its foreign inclusion factor at 25%, despite a recent foreign ownership limit increase to 40% from 25%.

Egypt's blue-chip index  inched up 0.4% as Egypt Kuwait Holding rose 3.9%. Last week, the firm reported a higher first-quarter profit.

El Sewedy Electric hiked 2.4% after saying on Tuesday it had partnered with General Authority For Suez Canal Economic Zone to establish a new company with issued capital of 1 billion Egyptian pounds ($59.17 million), in which the firm will own 49%.

($1 = 3.6728 UAE dirham)

($1 = 16.9000 Egyptian pounds)

(Reporting by Ateeq Shariff in Bengaluru; Editing by Andrew Cawthorne) ((AteeqUr.Shariff@thomsonreuters.com; +918067497129;))