The All-Shares Tadawul Index (TASI) reversed course to finish down 1.5 percent at 5,537.82 points after opening more than four percent higher.
It was dragged down by the market leader, petrochemicals giant SABIC which closed down 5.6 down after initially rising.
The leading petrochemicals sector was down 3.7 percent while banks dropped 1.3 percent.
The TASI, which operates from Saturday to Wednesday, finished the week down 10.1 percent and has shed a massive 25.8 percent in October. The index is 49.8 percent lower from the end of last year.
Four of the remaining Gulf bourses rose while Kuwait and Dubai dropped slightly.
The Kuwait Stock Exchange, the second largest Arab bourse, made a strong comeback at the close after sliding in initial trades.
The KSE Index, which was down 2.6 percent at one stage, finished just 0.1 percent lower at 9,676.30 points. It was spurred by a late rally by the leading banking sector, which gained 2.5 percent.
Traders said the index was also supported by other blue chips, mainly the marker leader and telecom giant Zain, which added 5.8 percent.
However, the investment firms index dropped two percent.
Those firms have been pressing the government for a bailout of an estimated 22-billion-dollar debt, almost half of it owed to foreign banks and some of which has already matured.
Trading in Gulf Bank, troubled by losses from derivatives deals, remained suspended for the fourth day running.
On Tuesday, the bank accepted the resignation of its chairman and appointed Qutaiba al-Ghanem as new chief. Ghanem said the bank has now abolished all trades in options and derivatives.
The Dubai Financial Market, which opened more than four percent higher, reversed course just before the finish and ended down 0.5 percent at 2,917.12 points.
Real estate developer and market leader Emaar, which rose 6.5 percent at one stage, ended down 1.5 percent.
The Doha Securities Market jumped 5.14 percent at the close, with all sectors sharply higher, but was still below the key 7,000-point mark.
Abu Dhabi Securities Exchange closed up 2.2 percent, with the key real estate sector 3.5 percent higher and banks adding 1.5 percent.
The small Muscat Securities Market gained 2.2 percent, while the Bahrain Stock Exchange rose 2.1 percent.
World stock markets continued their strong recovery on Wednesday after the Dow soared nearly 11 percent in New York a day earlier.
