However, they expected Arab stocks, particularly in the Gulf area, to pick up in the coming couple of weeks following Thursday's release of upbeat economic data in the United States and Europe that pushed up oil prices.

"I believe Arab bourses have come again under psychological pressure from global markets which were hit by the renewing euro zone debt crisis," an Amman-based portfolio manager told Arab News.

"Nevertheless, the latest positive US economic data and measures taken by the European Central Bank (UCB), including the buying of government bonds, are set to prop up both global and Arab stock markets," he said.

Oil prices, which hit a 25-month high of about $88 a barrel on Thursday, will provide momentum for regional stock markets, particularly in the Gulf area, he added.

Saudi shares were the major beneficiary from surging crude prices which mainly gave a boost to the petrochemical and energy sectors, analysts said.

The Tadawul All-Share Index (TASI) gained 0.85 percent on weekly basis, to close at 6,344.88 points.

Jordanian stocks were volatile last week due to a persistent liquidity shortage and lack of confidence, analysts said.

The all-share index of the Amman Stock Exchange shed 0.59 percent last week, closing at 2,358 points, according to the ASE weekly report.

Kuwaiti stocks plunged across the board last week, with analysts attributing the decline mainly to the delay in finalizing the deal whereby Kuwait's telecom group, Zain, intended to sell a controlling interest to the United Arab Emirates communications firm, Etisalat, at about $6 billion.

Kuwait's KSE all-share index plunged 1.58 per cent on weekly basis, closing at 6,818 points.

"The signing of the Zain deal will be one of the main factors expected to boost the Kuwaiti Stock Exchange," Kuwaiti analyst Ahmad Duwaisan said.

The UAE shares were mixed last week, with the benchmark of the Dubai stock exchange gaining 0.34 percent and closing at 1,687 points. The Abu Dhabi market's all-share index shed 0.41 percent, closing week in the red at 2,745 points.

Egypt's AGX 30 index, measuring the performance of the market's 30 most active stocks, plummeted 2.1 percent, closing week at 6,690 points due to what analysts described as weak buying on the part of both local and foreign investors.