Amman - Arab stock markets suffered heavy losses this week as gloom engulfed the region amid fears of a global recession.

Thursday's suspension of trading on the Kuwait stock exchange appeared to send a negative message to other markets in the region, financial analysts said Friday.

"I believe the halting of trading in Kuwait by a judicial decision could aggravate the situation not only in Kuwait but also at other Gulf and Arab stock markets," a portfolio manager told Deutsche Presse-Agentur dpa.

"I think the decision could turn out to be counter-productive and have negative repercussions ... when trading resumes next week," he said.

The ruling by the Kuwait administrative court to suspend trading until Monday has drawn conflicting reactions inside and outside the oil-rich emirate.

While small investors considered the ruling a "positive move" on the ground it may stop the bleeding of their finances, others warned against the negative impact on the already deteriorating confidence of investors.

Kuwait's KSE all-share price index plunged 10.2 per cent this week before it was closed at mid-session Thursday at 8,691 points.

In the government's latest bid to deal with the situation, the governor of the Central Bank of Kuwait, Sheikh Salem al-Sabah, disclosed the setting up of a fund for the purchase of assets of beleaguered investment firms who are willing to sell them.

He said the facility would be run by the state-owned Kuwait Investment Corporation (KIC).

Saudi shares fluctuated this week in thin trading seen as a response to the volatility on world markets and the sharp decline in oil prices.

The Tadawul All Share Index (TASI) of the Saudi stock exchange, the Arab world's largest bourse, lost a further 9.4 per cent this week, bringing its loss to more than 50 per cent since the start of 2008.

The decline was led by the petrochemical sector, notably the Saudi Basic Industries Corp. (SABIC), and the banking sector, analysts said.

In Jordan, the all-share price index of the Amman Stock Exchange plunged 12.03 per cent this week to close at 2,997.

The benchmark of the United Arab Emirates stock exchange inf Dubai dived 24.7 per cent during the week to close at 2,106, despite steps taken by the authorities to enhance liquidity.

Egypt's CASE 30 index, shed 8 per cent, closing at 4,823. (dpa)