Amman - Most Arab stock markets rebounded in the last two days of the week curtailing losses they incurred earlier.

But analysts said Friday regional bourses would remain "cautious" pending developments on world markets after the US Fed's decision to slash interest rates by 50 basis points.

"I believe Arab stock markets will continue to assume vigilance because investors are still lacking in appetite for risk and alert to what takes place on leading world markets," Wajdi Makhamreh, Chief Operating Officer of the Amman-based Sanabel International Holding, told Deutsche Presse-Agentur dpa.

"Steps taken by financial authorities, including interest rate cuts by central banks and the pumping of liquidity into the banking systems, will help shore up confidence, but investors still keep an eye on what is going on at the Wall Street and elsewhere," he said.

Makhamreh expected regional markets to witness profit-taking moves at times and speculators to stick to a "hit-and-run strategy" as a negative psychological sentiment, albeit unjustifiable, continues to grip Middle East bourses.

Saudi shares were strongly volatile this week, but the downward trend dominated the Arab world's largest stock market.

The Tadawul All Share Index (TASI) of the Saudi bourse plummeted 10.1 per cent this week, closing at 5,537.82 points. It was the first time the benchmark breaks downward the 6,000-point barrier since June 2004.

TASI is currently 49.8 per cent lower than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The report expected confidence "to build up" in the coming few weeks due to subsiding fears over the world financial crisis and assurances about the strength of the Saudi economy.

Investors are expected to make benefit from exceptionally low price of stocks and "gradually recoup part of the losses which accumulated during the year", the BIG said.

Jordanian shares also rebounded during the last two days of the week after suffering huge losses in the past two weeks on fears of a global recession.

The all-share index of the Amman Stock Exchange shed 2.46 per cent this week, closing at 3,172 points, according to the ASE weekly report.

Kuwaiti stocks rebounded on Thursday for the first time in 10 days, apparently after the National Assembly passed a legislation guaranteeing all deposits at commercial banks without any ceiling.

The KSE all-share price index plunged 7.7 per cent this week, closing at 9,676 points.

The United Arab Emirates stocks fluctuated violently during the week. The stock exchange of Dubai gained 0.85 per cent closing week on Thursday at 2,942 points while the stock exchange of Abu Dhabi closed 0.73 per cent in the red at 3,326 points. (dpa)