* Brent oil back above $62 a barrel aids sentiment
* Large Saudi 2015 budget expected to be announced this week
* Shares in Dubai Financial Market rocket 10.1 pct
* Qatar's Gulf International Services rises daily limit
* Tunisia's market firm after presidential election
By Andrew Torchia
DUBAI, Dec 22 (Reuters) - Most Gulf equity markets continued rising on Monday but their uptrend slowed, suggesting the benefits of stabilising oil prices and expectations for a large Saudi Arabian state budget had now largely been factored into stocks.
The main Saudi index closed 0.3 percent higher, after jumping 16 percent over the previous three days. Turnover remained active but dropped by about a fifth from Sunday's level.
Brent crude climbed over 1 percent to above $62 per barrel on Monday. Analysts said Brent had received broad support after testing $60 a barrel earlier this month, and that a consensus was growing that prices would likely remain above that level for the rest of the year.
This has improved sentiment among Gulf stock market investors, even though the long-term outlook for oil prices remains murky and fresh falls cannot be ruled out next year.
Also, contrary to the stock markets' earlier fears, Saudi Arabia's 2015 budget is not expected to cut spending much if at all in response to the recent slide of oil prices.
Saudi Finance Minister Ibrahim Alassaf went out of his way to reassure the markets last Wednesday when he said his government would continue spending strongly on development projects and social benefits in the budget.
The budget was originally expected to be announced on Monday afternoon, but Saudi media reported the release would occur later this week, after a special cabinet meeting.
Monday saw profit-taking in some stocks which led the recent rally such as property developer Dar Al Arkan, which fell 0.8 percent and was again the most heavily traded Saudi stock. On Sunday, Dar Al Arkan had soared 9.3 percent.
But petrochemical producer Saudi Kayan, up 9.8 percent on Sunday, added a further 6.2 percent on Monday. Other major gainers included second- or third-tier stocks that had been neglected in the rally, such as Islamic insurer Solidarity , up 5.6 percent.
DUBAI
The Dubai index climbed 2.3 percent after jumping 9.9 percent on Sunday and 13.0 percent on Thursday. Bourse operator Dubai Financial Market soared 10.1 percent, a fresh sign that investors believe the bruising downtrend in Gulf equities of recent weeks has ended and that investor activity will revive.
Qatar rose 3.3 percent; property developer Ezdan Holding was the most heavily traded stock, rising 3.4 percent.
Gulf International Services, an oil and gas drilling services firm which was hit hard during recent weeks because of the slump in oil prices, surged its 10 percent daily limit.
"The recent sell-off in the Gulf has opened up opportunities in the Qatar market, given the undemanding valuations sparked by the current volatility," Nick Wilson, chairman of London-listed Qatar Investment Fund, said in a note.
He estimated the Qatar index's prospective price/earnings ratio at 13.7 times with a dividend yield of 4.4 percent, which he said was attractive given the fact that Qatar needs a relatively low oil price to balance its budget.
But Gulf Warehousing sank 0.6 percent to 53.00 riyals in active trade after its board proposed boosting the company's capital by 25 percent via a rights issue to shareholders at 40.00 riyals per share.
Oman's market climbed 3.7 percent. It has outperformed most of the Gulf since the executive president of the State General Reserve Fund, the country's largest sovereign wealth fund, told Reuters at the end of last week that the SGRF had boosted its buying of shares in the local market because prices had slid to attractive levels.
The Tunisian market rose 0.6 percent, bringing its gains in the last four trading days to 3.7 percent, though it closed well off its intra-day high.
Veteran politician Beji Caid Essebsi declared victory in Sunday's presidential run-off vote, seen as the last step in Tunisia's shift to full democracy four years after an uprising ousted autocrat Zine El-Abidine Ben Ali.
MONDAY'S HIGHLIGHTS
DUBAI
* The index rose 2.3 percent to 3,852 points.
ABU DHABI
* The index fell 0.9 percent to 4,478 points.
SAUDI ARABIA
* The index edged up 0.3 percent to 8,547 points.
QATAR
* The index gained 3.3 percent to 12,421 points.
EGYPT
* The index edged up 0.2 percent to 8,703 points.
OMAN
* The index climbed 3.7 percent to 6,219 points.
KUWAIT
* The index rose 1.1 percent to 6,503 points.
BAHRAIN
* The index edged down 0.3 percent to 1,406 points. (Reporting by Andrew Torchia)
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