ISTANBUL

Stocks in the United Arab Emirates (UAE) dropped sharply on Wednesday as markets in Dubai and Abu Dhabi reopened after a two-day shutdown triggered by Iranian drone and missile attacks.

Dubai’s benchmark index fell about 4.9%, putting it on track for its steepest decline since May 2022. Abu Dhabi’s main index slipped more than 3%, marking its sharpest intraday drop since August, while the Nasdaq UAE 20 index declined 4.3%.

In Dubai, losses were led by state-owned lender Emirates NBD, which fell 5.2%. In Abu Dhabi, Al Buhaira National Insurance Company and Umm Al Qaiwain General Investments posted the largest declines, sliding 9.6% and 8.7%, respectively.

Ahead of the reopening, both exchanges announced a temporary adjustment to the lower daily price limit for securities, setting the threshold at -5%.

The market reaction follows Iranian missile and drone strikes on the UAE over the weekend, launched in retaliation for joint US-Israeli attacks that killed Iran’s Supreme Leader Ayatollah Ali Khamenei. The strikes also hit some civilian and commercial sites, including Dubai International Airport, and Amazon data centers.

Airspace restrictions across the UAE forced the cancellation of thousands of flights, weighing on aviation-related stocks. Budget carrier Air Arabia dropped around 5%.

The Gulf sell-off comes amid broader global market volatility linked to the escalating Iran war. Asian stocks resumed their decline on Wednesday, while European markets opened higher after two consecutive sessions of losses. Meanwhile, US stock futures pointed to a weaker start after Wall Street’s major indexes closed lower on Tuesday.