Amman - The US bailout plan is expected to have a "positive impact" on Middle East markets, which plummeted under the "psychological" fallout of the US financial crisis over the past few weeks, financial analysts said Friday.

"We believe the US rescue plan will have a positive impact not only on global markets but also on Middle East markets," Wajdi Makhamreh, Chief Operating Officer at the Sanabel International Holding told the Deutsche Presse-Agentur dpa.

"The scheme will help evade the collapse of the world financial system. However, doubts will continue to be raised as to the effectiveness of the salvage blueprint," he said.

US Congressional leaders said Thursday that they had reached an agreement on the fundamentals of a proposed 700-billion-dollar bailout of the financial system.

"Arab bourses suffered a lot over the past couple of weeks as a result of a psychological sentiment rather than logical reasons in the wake of the collapse of the US Lehman Brothers bank and its repercussions," Makhamreh said.

He expected Arab markets would assume "vigilance" in the coming weeks as investors monitor the impact of the US rescue plan on global markets.

Saudi shares plunged for the fourth week in a row this week, bringing to about 20 per cent the total loss of the Saudi stock exchange in a month.

The Tadawul All Share Index (TASI) of the Arab world's largest bourse shed further 3.4 per cent this week, closing at 7,133.47 points.

TASI is currently 35.4 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 Saudi market to "react positively" to the US rescue plan, while investors keep an eye on the third quarter results which usually start to come out in the first week of October.

Jordanian shares were volatile this week, as investors apparently came under the impact of the negative sentiment in other regional markets.

The all-share price index of the Amman Stock Exchange gained 3.15 per cent this week, closing at 3,984 points, according to the ASE weekly report.

Kuwait's KSE all-share price index declined 1.7 per cent, closing at 12,569 points.

The benchmark of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi gained 1.8 per cent this week, closing at 4,587 points.

Egypt's CASE 30 index, which measures the performance of the market's 30 most active firms, shed 1.7 per cent to close week at 6,945 points. (dpa)