* Saudi trading volume shrinks despite market's rise
* Banks rebound after loan rescheduling worries
* National Petrochemical continues rising after upgrades
* Zain Saudi, consumer stocks pull back
* Dubai's DFM falls; VTB thinks may be excluded from MSCI index
By Andrew Torchia
DUBAI, Oct 6 (Reuters) - Saudi Arabia's stock market continued rebounding on Thursday, led by bank and petrochemical shares, but most markets in the region weakened.
The Saudi index rose 0.8 percent, although trading volume shrank to a modest level, suggesting many investors were staying out of the market.
The banking index, beaten down in past days by news that banks would have to reschedule consumer loans and housing mortgages as government austerity steps cut their customers' incomes, rose 1.1 percent.
Some petrochemical shares were also strong after Brent oil futures rose as high as $52.09 per barrel overnight, the highest since early June.
National Petrochemical, which had surged 8.2 percent on Wednesday, climbed a further 3.0 percent to 15.60 riyals; NCB Capital and SICO upgraded their views of the stock this week, with targets of 17.30 and 19.00 riyals respectively.
National Industrialisation (Tasnee), which has petrochemical assets, gained 4.0 percent.
But telecommunications firm Zain Saudi pulled back 3.9 percent after rising in the previous two days on hopes it would benefit from deregulation. Many stocks directly exposed to consumer demand continued to slide because of the austerity policies; retailer Al Hokair also fell 3.9 percent.
There was massive trade in Takween's rights on their last day of trade; the rights sank 37.6 percent as the underlying stock rose 6.4 percent.
Dubai's index slipped 0.2 percent as shares in Dubai Financial Market fell 2.4 percent. VTB Capital said MSCI might exclude the stock from its MXAE index in its November review, to be announced on Nov. 14, because of its low capitalisation; in order to remain in the index, the stock will have to rise 8 percent by late October, VTB calculated.
Abu Dhabi's index edged down 0.1 percent while Qatar fell by the same amount. Egypt's market was closed for a national holiday.
* The index rose 0.8 percent to 5,631 points.
* The index fell 0.2 percent to 3,355 points.
* The index edged down 0.1 percent to 4,390 points.
* The index edged down 0.1 percent to 10,357 points.
* The index dropped 0.7 percent to 5,320 points.
* The index edged down 0.1 percent to 5,610 points.
* The index fell 0.2 percent to 1,137 points.
Editing by Larry King