On Wednesday, the UAE stock markets saw a significant decline, with the Dubai bourse dropping by 4.71% and Abu Dhabi closing 1.93% lower.

The UAE markets reopened on Wednesday after the regional military conflict involving the US, Israel, and Iran began on Saturday.

The Dubai Financial Market General Index ended at 6,197.19 points, down by 4.71%.

Except for National Cement Co., all shares ended negatively, with Amlak, Dewa, Dubai Investments, Dubai Residential REITs, Emirates NBD, and Mashreq Bank all losing five percent each.

The Abu Dhabi Securities Exchange closed 1.9% lower at 10,251.58 points, with Aldar, Abu Dhabi National Hotels, and Adnoc Distribution all dropping by five percent during the day.

Chiro Ghosh, group head of research at the Bahrain-based investment bank Sico, mentioned to Reuters, "The five percent cap offers some breathing space and partially curbs the initial panic among investors. However, if the conflict persists, we would expect stocks to correct in line with their regional peers."

Vijay Valecha, chief investment officer at Century Financial, stated that this temporary dip could present interesting opportunities in the UAE's long-term equity story.

The UAE regulator (CMA) announced that Dubai’s stock exchange is making a temporary adjustment to the limit down threshold to 5%, aiming to maintain orderly market conditions.

Earlier in the year, UAE stocks had a strong start, boosted by significant foreign investments.

Ghosh added, "We anticipate sectors such as real estate, transportation, and tourism-related companies to underperform the index in the short term, but we see this as an opportunity for other stocks and sectors once the market stabilizes."

Additionally, the Abu Dhabi Securities Exchange urged listed companies to review their exposures in light of current market conditions and disclose any material information that could impact investors' decisions.