Amman - Arab stock markets tumbled this week as panicked investors dumped shares to avert worse repercussions of the global recession despite steps taken by financial authorities to replenish liquidity shortages, financial analysts said Friday.

"Investors in the region are still suffering from psychological pressures and indirect impact of the global financial turmoil," Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told Deutsche Presse-Agentur dpa.

"Despite the continued pumping of liquidity in regional markets, I believe investors will continue to be captives of what is going on leading world markets and at the Wall Street in particular," he said.

Taher and other analysts believed foreigners were selling their holdings of Arab stocks to cover their losses elsewhere.

To prop up retreating confidence, the Jordanian and Egyptian governments have assured investors and the public that they would guarantee bank deposits in the two Arab countries until the end of 2009.

OPEC's decision on Friday to cut oil production as of November 1 by 1.5 million barrels per day is expected to have a positive effect on regional markets next week, as falling crude prices was partly blamed for the plummeting of stocks, analysts said.

Saudi shares sank this week, led by the petrochemical and banking sectors, as concerns escalated regarding the results of firms in the third and fourth quarters of the year.

The Tadawul All Share Index (TASI) of the Arab world's largest bourse plunged 10.2 per cent this week to close at 6,160.80 points.

TASI is currently 44.2 per cent lower than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The BIG expected the market to "stabilize and to become increasingly not correlated with world markets" due to the pumping of more liquidity into the banking system.

Jordanian shares also suffered heavy losses this week amid reports of sell-offs by foreigners to finance their commitments in other markets and retreating liquidity.

The all-share price index of the Amman Stock Exchange plummeted 9.55 per cent this week, closing at 3,252 points.

Kuwait's KSE all-share index sank 9.2 per cent this week, to close at 10,481 points.

Egypt's CASE 30 index, which measures the performance of the market's 30 most active stocks, dived 15.5 per cent this week, closing on Thursday at 4,897 points.

All regional markets will be closed on Saturday for the weekend except the Saudi stock exchange. (dpa)