AMMAN: Arab stock markets rebounded last week, deriving momentum from US and International Monetary Fund (IMF) reports that the world economy was at the threshold of recovery, financial analysts said Friday.

They expected regional bourses to extend gains after the Eid Al-Fitr feast which heralds the end of the fasting month of Ramadan in the last week of September.

"I believe Arab stock markets are making benefit from the positive sentiment which has started to prevail in the United States and other key economies following reports that the recession is coming to an end," Wajdi Makhamreh, chief operating officer at the Amman-based Sanabel International Holding, told Arab News.

"Any development outside is reflecting on us in the Middle East with varying degrees, due to the correlation that exists between Western economies and Arab countries particularly in the Gulf region," he said.

However, Makhamreh said that investors' attention in the coming weeks will also focus on the third quarter results of listed firms.

Saudi shares scored gains, propelled by the petrochemical sector particularly the Saudi Basic Industries Corp. (SABIC) which climbed 5.5 percent last week following news that China was reducing protection fees for some petrochemical products.

The Tadawul All-Share Index (TASI) gained 1.7 percent last week, closing at 5,712.95 points.

TASI is currently 18.9 percent higher than the year's start, according to the weekly report of the Riyadh-based Bakheet Investment Group (BIG).

The report expected the Saudi market to witness "relative stability" in the coming couple of weeks as investors would be awaiting the third quarter results.

Jordanian shares also extended gains this week with more foreign liquidity arriving at the Amman Stock Exchange (ASE) to make benefit from the low prices of stocks, Makhamreh said.

However, he believed that "a wave of speculation was pushing up prices of selective stocks which lacked fundamentals that justify such a rally".

The ASE all-share price index gained 1.41 percent last week, to close at 2,642 points, according to the market's weekly report.

Kuwait's KSE all-share price index shed 0.8 percent last week, closing at 7,723 points.

The benchmarks of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi climbed 6.2 percent and 6 percent to close respectively at 2,040 points and 3,061 points.

Egypt's AGX30 index, which measures the performance of the market's 30 most active stocks, rose 1.1 percent last week, closing at 6,690 points.