Dubai Shares Plunge 4.7% as Markets Reopen after Two-Day Closure amid Iran War

UAE equities tumbled sharply on Wednesday as trading resumed following a two-day market suspension triggered by the outbreak of war involving Iran, marking one of the steepest declines in recent years and underscoring mounting geopolitical risks across the Gulf.

The benchmark index of the Dubai Financial Market closed down 4.7%, recording its largest single-day drop since May 2022. In Abu Dhabi, the Abu Dhabi Securities Exchange saw its FTSE ADX General Index fall 1.9% by the end of trading.

The selloff followed an extraordinary decision by the Securities and Commodities Authority to suspend trading on March 2 and 3 in both Dubai and Abu Dhabi. The precautionary closure came after the UAE was targeted by missile and drone attacks launched from Iran, in the wake of strikes carried out by the United States and Israel on Tehran over the weekend.

Upon reopening, Dubai authorities activated a temporary 5% daily price fluctuation limit aimed at curbing excessive volatility. Several heavily traded stocks quickly hit that threshold during Wednesday’s session, intensifying downward pressure on the broader index.

Losses were led by blue-chip heavyweights including Emirates NBD and Emaar Properties, whose substantial weighting in the index amplified the market’s overall decline. Analysts said foreign investors were among the most active sellers as risk appetite deteriorated in response to regional instability.

The abrupt reversal comes after a period of remarkable strength. In February, Dubai equities had surged to their highest levels since 2006, buoyed by investor confidence in the emirate’s economic resilience. Over nearly six years, the benchmark index had posted gains approaching 300 percent, supported by robust consumer spending, a booming property market, and rapid expansion in financial services.

The current conflict, however, threatens to unsettle the image the UAE has carefully cultivated as a haven of stability in a region frequently marked by turbulence. Market participants now face heightened uncertainty over potential escalation and its implications for capital flows, tourism, and investor sentiment.

Elsewhere in the Gulf, markets showed tentative signs of stabilization. Equities in Saudi Arabia, Qatar, and Kuwait recouped part of their earlier losses on Wednesday, aided by rising oil prices amid concerns about potential supply disruptions linked to the unfolding war.