They expected regional markets to be volatile in the coming weeks pending a clarification of the ”ambiguity” that surrounded the US and European economies.”I believe investors will be appraising the exposure of the Arab economies, particularly in the oil-rich Gulf region, to the fallout of the S&P downgrading of the US sovereign debt,” Wajdi Makhamreh, CEO of the Amman-based Noor Investments, told Arab News.Makhamreh expected Arab countries with surplus petrodollars to shift part of their investments from the US to countries with better investment outlook like Germany, Canada or France. He viewed little room for returning home part of the Arab surpluses due to the ongoing political upheaval in the Middle East.Saudi shares spearheaded the regional plunge last week, led by the petrochemical sector which stood a high chance of bearing the brunt of an expected shrinkage in demand for oil and petrochemical products due to fears of a double-dip world recession.The Tadawul All-Share Index (TASI) sank 6 per on weekly basis, closing at 6,039.32 points.”What happens now is a struggle for liquidity, be it in global or emerging markets,” Saudi analyst Mohammad Anqari said.”The situation is foggy and everyone wants to know what is going to happen for the US and European economies,” he added.Anqari said that the Saudi petrochemical sector ”which is completely linked to the global economy” would be the key loser from any stagnation in the world’s major economies. He expected the Saudi market to remain ”flat” above the 6,000-point level pending the emergence of fresh moving factors.Anqari expected ambiguity to dominate the global economic situation for a period of between 4 and six weeks.”The global crisis is developing into a crisis of states, which could slide to the worse,” he said.Kuwait’s KSE all-share index fell 3.55 percent last week due to the US downgrading, to close at 5,851 points.Kuwaiti analyst Amer Tamimi expected a negative fallout for the US downgrading on Kuwaiti in terms of lower oil prices and weaker dollar.The benchmarks of the United Arab Emirates stock markets of Dubai and Abu Dhabi also plunged 5 percent and 3 percent on weekly basis, to close respectively at 1,464 points and 2,589 points.Qatar’s index sank 4.5 percent, closing week at 8,107 points, while Bahrain’s benchmark closed 1.15 percent in the red, at 1,266 points.The all-share index of the Amman Stock Exchange (ASE) lost 2.73 percent on weekly basis, closing at 2,014 points.Egyptian shares were the largest loser last week due to repercussions of the S&P downgrading of the US credit rating.Egypt’s AGX 30 index, which measures the performance of the market’s 30 most active stocks, plummeted 8.3 percent, closing at 4,592 points.The GulfBase GCC Index dropped 4.97 percent to 3,646.41 points last week. The value of traded shares, however, surged 53.96 percent to $6.32 billion and volume increased 58.19 percent to 2.40 billion of shares.