They also attributed the decline to a deep profit-taking move and speculative trading that usually precede the release of the semi-annual results.

”I believe regional markets have come under impact of the euro zone sovereign debt crisis pertaining to Greece as well as reports of weak world recovery,” Nizar Taher, chief of brokerage at the Jordan Ahli Bank, told Arab News.

He said the political turmoil in the Arab world, which sparked a flight of foreign capital from the region, would continue to have a negative spill-over on Arab stock markets.

Taher, however, said regional markets stood to benefit from oil prices above $100 per barrel and the huge public spending of the Gulf Cooperation Council (GCC) member states.

Saudi shares lost ground for the second week in a row due to a deep profit-taking move which analysts said preceded the release of the second quarter earnings.

The Tadawul All Share Index (TASI) of the Arab world’s largest stock exchange shed 1.48 percent on weekly basis, closing at 6,449.50 points.

Saudi analyst Mohammad Anqari attributed last week’s decline to ”a profit-taking and speculative activity which usually test the support areas before the publication of semi-annual results”.

He expected the downward correction would pave the ground for rebounds in the coming weeks.

Other analysts expected Saudi shares to drop further in the short term due to the summer vacations and the advent of the Muslim fasting month of Ramadan early in August.

Jordanian shares came under fresh pressure from lack of confidence and the persistent liquidity crunch, Taher said.

The all-share index of the Amman Stock Exchange lost 1.7 percent last week, closing at 2,123 points, according to the ASE weekly report.

Kuwaiti stocks extended losses last week due to the absence of moving factors and the persistent showdown between the government and the National Assembly, according to the weekly report of the Wodouh Investments brokerage.

Kuwait’s KSE all-share index shed 1.17 percent, to close week at 6,263 points.

The UAE and Qatari shares also closed in the red last week after the Morgan Stanley Capital International (MSCI) postponed for six months its long awaited decision on a potential upgrade of the UAE and Qatar stock exchanges to ”emerging markets” from ”frontier market” status.

The MSCI is a global provider of equity benchmark indices to investors.

The benchmarks of Dubai and Abu Dhabi markets plummeted 4 percent and 1.62 percent on weekly basis, to close respectively at 1,537 points and 2,716 points.

Qatar’s all-share index also lost 1.27 percent last week, closing at 8,214 points.

Bahrain’s index shed 0.49 percent, to close week at 1,338 points.

Egypt’s AGX 30 index, which measures the performance of the market’s 30 most active stocks, lost 1.1 percent on weekly basis, closing at 5,480 points.