The plunge slashed many more billions from the combined value of regional markets to add to enormous losses chalked up in the past three days as concerns mounted about the impact of the global financial crisis on the oil-rich region.

The seven Arab stock markets in the Gulf shed about $150 billion of their capitalization this week, shrinking their combined value around $800 billion.


Mideast markets plunge

After slumping more than seven percent in early trading to its lowest point in more than four years the stock market in Saudi Arabia, the Arab world's largest, rebounded strongly at the close on Wednesday, eradicating most of the day's earlier losses following a coordinated international rate cut.

The rebound came after several international central banks announced a coordinated interest rate cut of 0.5 percentage points. Such measures are normally followed by the Saudi monetary authorities.

The Kuwait Stock Exchange, the second largest in the Arab world, was down nearly three percent halfway through trading on concerns over a 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 to 4.5 percent.


Worldwide bloodbath


It is the first time in several years that the bank has taken a monetary policy decision that did not follow a move by the U.S. Federal Reserve.

On the Dubai Financial Market, shares have lost more than a quarter of their value since the trading week began on Sunday, closing Tuesday at its lowest level in more than two years.

The Abu Dhabi Securities Exchange shed five percent while the Muscat Securities Market slumped six percent, the lowest in more than two years.

The Doha Securities Market Index dropped eight percent, the biggest single-day drop in gas-rich Qatar's financial market in several years.

Egypt's key CASE-30 stock index, which has lost more than half its value in six months after almost doubling its value over the past four years, fell nearly 13 percent in early trading on Wednesday.

"We're swamped here," Ahmed Hefnawi, an analyst with major investment bank EFG Hermes, told AFP, declining to comment further on the meltdown.

Asian stock markets also suffered massive losses Wednesday with the worst crash in Tokyo in more than two decades as panic-selling erupted over the deepening financial crisis. The bloodbath forced some countries to take dramatic steps to try to stem the selling. Indonesia suspended trading on its market after stocks plunged more than 10 percent.

The latest plunge came after Wall Street's Dow Jones Industrial Average sank more than 500 points or five percent on Tuesday to a five-year closing low.

The steep falls came despite the latest efforts by global policymakers to try to shore up ailing markets. including a $700 billion bailout proposed by the U.S. and a $875 billion rescue package unveiled by Britain Wednesday for its ailing banking industry after key bank shares tumbled 40 percent.

Agencies