Amman - Arab stock markets extended gains this week, buoyed by stable oil prices and good results reported by listed firms in the first quarter of the year, financial analysts said on Friday.

However, they believed regional markets would remain "volatile" in the coming weeks with investors keeping an eye on developments on global markets.

"There is improvement in confidence due to rising oil prices and better-than-expected first quarter corporate profits," Wajdi Makhamrerh, Chief Operating Officer at the Amman-based Sanabel International Holding, told the German Press Agency dpa.

"But we think speculation is still the dominant factor with investors coming under psychological pressure from world markets rather than focusing on fundamentals," he said.

"Traders continue to focus on small caps rather than taking long-term positions to avoid losses," he added.

Saudi shares rallied for the fifth week in a row this week, driven by the positive first quarter results scored by Saudi banks and petrochemical firms, particularly the Saudi Arabian Fertilizers Co. (SAFCO).

The Tadawul All Share Index (TASI) of the Arab world's largest stock exchange climbed 6.7 per cent this week, closing at 5,377.24 points.

TASI is currently 12 per cent higher than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The Saudi stock market also drew momentum from a decision by the Saudi Arabian Monetary Agency (SAMBA) to trim the reverse repo rate by 25 basis points in response to the declining inflation pressures in the country, the report said.

The BIG said that the market would be eying further results of listed firms, particularly the Saudi Arabian Basic Industries Corp. (SABIC), the profits of which "will have a strong impact on the market."

The Amman Stock Exchange was the scene for strong fluctuations this week, though rising demand from the oil-rich Gulf region on Jordanian stocks reportedly propped up the market on Thursday.

The ASE all-share price index gained 1.53 per cent this week, closing at 2,764 points, according to the market's weekly report.

Kuwaiti stocks rallied for the third consecutive week, as the Emir Sheikh Sabah al-Ahmad al-Sabah set May 16 as date for the general elections after dissolving the parliament.

The KSE all-share price index gained 2.1 per cent this week, to close at 7,418 points.

The United Arab Emirates shares extended gains this week giving the impression that the upward trend would continue in the coming weeks, Husam Husseini, head of brokerage at the Dubai-based Amana Company for Financial Services, said.

The benchmark prices of the Dubai and Abu Dhabi stock exchanges gained 1.43 per cent and 1.26 per cent his week, closing at 2,679 points and 1,712 points respectively.

Egypt's AGX 30 index, measuring the performance of the market's 30 most active stocks, gained 3.8 per cent this week, to close at 4,969 points. (dpa)