Dubai stocks rose to the highest level in more than two years as the emirates’ biggest companies prepare to report full-year earnings that investors expect will improve amid an economic recovery.

Dubai Financial Market PJSC, the only publicly traded Gulf Arab stock market, surged 6 percent. Emaar Properties PJSC, the developer of the world’s tallest skyscraper, rose to a one-week high. The benchmark DFM General Index jumped 1.9 percent to close at 1,774.92, the highest level since November 2010 and taking this week’s gain to 1.1 percent. About 392 million shares were traded Wednesday, more than double the 12-month daily average.

Dubai’s economy is recovering after a property market crash that started in 2008 sent home prices tumbling more than 65 percent. The economy expanded 5 percent in 2012, the fastest pace since 2007, according to government forecasts. The emirate, which was on the verge of a default in 2009, witnessed a pickup in tourism, with hotel and restaurant industries growing 16 percent in the first half, government data show.

“Expectations for year-end results are positive and the stocks are pricing in these expectations” amid the emirate’s economic recovery, said Nabil Rantisi, managing director of brokerage at Abu Dhabi-based Menacorp.

Emaar, which has the heaviest weighting on Dubai’s index, may post a 15 percent increase in 2012 net income, according to the average estimate of 11 analysts compiled by Bloomberg. The developer, due to announce results Feb. 14, is considering spinning off its malls unit and would list the business on the stock exchange when market conditions are favorable, two people familiar with the matter said this week. The shares rose 1.2 percent to 4.13 dirhams, the highest level since Jan. 10.

Dubai Financial Market, which relies in part on trading volume for revenue, will probably return to profit in 2012 after a loss of 6.9 million dirhams ($1.9 million) the year earlier, the median estimate of three analysts on Bloomberg shows. The shares surged to 1.23 dirhams, the highest since April 3. Emirates NBD PJSC, the United Arab Emirates’ largest bank by assets, gained for a second day after its Islamic unit said it may more than double profit this year.

The DFM General Index’s 14-day relative strength index rose to 79 Wednesday. A reading above 70 indicates to some analysts that a security or index is poised to decline. The measure was the GCC’s best-performer last year with a gain of 20 percent.

“The economic revival in Dubai has become a reality, and more investors are ready to allocate money as risk appetite is back, especially as the news flow is extremely positive,” said Sebastien Henin, who helps oversee $100 million at The National Investor in Abu Dhabi.