The seven stock markets in the Gulf lost more than 50 billion dollars of capitalisation in the latest rout, bringing their total fall in value this week to around 200 billion dollars. Their value now stands at 750 billion dollars.

"High tension and panic are gripping the Gulf stock markets," Kuwaiti economist Hajjaj Bukhdur told AFP.

"Some major portfolios and investment funds are pressurising governments to intervene by injecting liquidity," he said.

Stocks in Saudi Arabia -- the largest bourse in the Middle East -- slumped by more than 7.5 percent, trading below the 6,000-point mark for the first time in more than 52 months.

Minutes after opening on the last day of the trading week, the Tadawul All-Shares Index was at 5,782.03 points, its lowest level since July 2004.

The slide came despite assurances by Mohammad al-Jasser, deputy governor of Saudi Arabian Monetary Agency, the kingdom's central bank, that Riyadh faces no liquidity problems and is not exposed to the global financial crisis.

Egypt's key CASE-30 stock index sank 12.56 percent to 5,156 points within a few minutes of the start of business, threatening to repeat Tuesday's 16.47 percent drop which took the index to a two-year low.

The CASE-30 has lost more than half its value in six months after almost doubling its level over the past four years to hit a high of 12,000 points in May.

In the booming Gulf emirate of Dubai, shares have lost more than a quarter of their worth since the trading week began on Sunday.

The Dubai Financial Market sank another 9.68 percent to 3,043 by mid-morning, as prices of all 27 shares fell. Losers were led again by real estate developer Emaar, which shed 10 percent.

"I think the crisis in Dubai will be much bigger because of signs of weakness in the real estate market and as Dubai is more exposed to global markets," Bukhdur said.

The Kuwait Stock Exchange, the second largest in the Arab world, was down 2.8 percent halfway through trading on concerns of lack of liquidity and global financial meltdown.

In a move reflecting the government's growing concern, the Central Bank of Kuwait cut its discount rate by 1.25 percentage points, the biggest reduction for many years, to 4.5 percent.

The Doha Securities Market Index dropped 8.3 percent to 7,471.73 points, the biggest single-day decline in gas-rich Qatar's financial market in several years.

The Abu Dhabi Securities Exchange shed 5.44 percent while the Muscat Securities Market slumped 6.33 percent and was below the 7,000-point mark for the first time in more than two years.

The Beirut Stock Exchange appeared to be less severely affected.

"There was a decline of about one percent on Wednesday," Youssef Sadek, deputy secretary general of the Beirut Stock Exchange, said after the markets closed.

Nassib Ghobril, head of economic research and analysis at Bank Byblos, said the market declined by 3.4 percent on Tuesday and almost five percent on Monday, but noted that it was up five percent in the year to date.

The Tel Aviv stock exchange was closed on Wednesday, when observance of Yom Kippur, the Jewish Day of Atonement, starts at sunset. It will reopen on Sunday.

On Tuesday, stocks rose, with the TA-25 index up 3.91 percent after the Bank of Israel announced a 0.5-point cut in its base rate to 3.75 percent.

© 2008 Agence France-Presse