They expected regional markets to rally in the coming weeks in response to this week's strong gains by global markets, signs of easing European sovereign debt fears and rising crude prices.

Major gainers were the Saudi and Egyptian markets, while most of other Arab stock exchanges closed in the red, mainly due to liquidity crunch and profit-taking moves.

"I believe Arab stock markets stand to gain from good news in Europe, particularly the good demand for Spanish government bonds and sharp rise in industrial production," Wajdi Makhamreh, CEO of the Amman-based Noor brokerage, said.

"I think oil prices above $75 a barrel will give a hand to regional markets, particularly in Saudi Arabia and other Gulf states," he said.

The Saudi stock exchange received momentum mainly from oil prices which hit $77 a barrel on Thursday.

The Tadawul All-Share Index (TASI) climbed 3.85 percent last week, closing at 6,346.44 points. The value of Saudi traded shares increased to SR21.20 billion compared to SR17.65 billion in the previous week.

The rally was led by the petrochemical sector, particularly the Saudi Arabian Basic Industries Corp. (SABIC) which earlier in the week signed a credit facility agreement amounting to $1 billion with Alinma Bank for financing part of its projects.

Jordanian shares deepened losses last week as a sentiment of optimism dominated the market due to liquidity shortage and weak foreign buying, Makhamreh said.

The all-share price index of the Amman Stock Exchange shed further 1.1 percent last week, closing at 2,339 points, according to the ASE weekly report.

Kuwaiti shares also suffered last week amid concerns that the Kuwaiti sovereign investments could be affected as a result of the losses incurred by British Petroleum due to the US oil spill. Kuwait reportedly owns between 6 and 7 percent of the slumped BP shares.

Kuwait's KSE all-share index lost 0.9 percent last week, to close at 6,583 points, its lowest level in 2010.

Kuwaiti analyst Maitham Al-Shakhs expected Kuwaiti shares to pick up in the coming couple of weeks due to window-dressing operations that mark the end of June every year.

United Arab Emirates shares continued to come under pressure last week from the fallout of the Dubai World debt and weak foreign demand, analysts said.

The benchmarks of the Dubai and Abu Dhabi stock exchanges shed 1 percent and 0.4 percent to close respectively at 1,500 points and 2,515 points.

Egypt's AGX30 index, which measures the performance of the market's 30 most active shares, gained 2.8 percent last week due to strong foreign buying, closing at 6,418 points.

The GulfBase GCC Index increased 1.87 percent to 3,666.84 points. The value of GCC traded shares jumped 21.21 percent to $6.89 billion and volume surged 19.05 percent to 2.79 billion of shares.