Shares in Qatar’s stock exchange plunged on Monday after Saudi Arabia, UAE, Bahrain and their North African ally Egypt announced that they would be severing diplomatic ties with Qatar, blaming Doha for meddling in regional affairs and supporting terrorism.

The Qatar Exchange benchmark index retreated 7.9 per cent in early trade to 9,143.89, the lowest level in more than a year. All 43 listed securities on bourse slumped with blue-chip, banking, property and telecommunications stocks taking the biggest hits.

Vodafone Qatar, was the most traded share sliding the maximum allowed 10 per cent daily limit. Property developers Ezdan Holding and Mazaya Qatar, which were also among heavily traded stocks, dropped 9.9 per cent and 10 per cent, respectively. Shares in the country’s top lender and index heavyweight, Qatar National Bank (QNB), fell 6.3 per cent, while Commercial Bank of Qatar and shariah-compliant Masraf al-Rayan dropped 7.8 per cent 9.9 per cent respectively.

On 5 June, Saudi Arabia, Bahrain, UAE and Egypt severed diplomatic links with Doha, accusing Qatar of fuelling instability in the region. The three Gulf closed their airspace, ports and territorial waters to air traffic and shipping to and from Qatar, as well as banning Qatari citizens from travelling. Qatari residents and nationals have been given 14 days to leave the UAE. Cairo has yet to clarify if it will bar Egyptian citizens and residents from travelling to Qatar, and whether it will ask Qataris to leave Egypt.

Tensions rose between Qatar and the rest of the GCC in May, when Qatar’s state news agency quoted the country’s Emir Sheikh Tamim bin Hamad al-Thani as criticising renewed tensions with Tehran and suggesting US President Donald Trump might not “last long in power”. The comments were immediately denied by Doha.

Other GCC stock markets also fell following the announcement that the three GCC states and Egypt were cutting diplomatic ties with Qatar. The Dubai Financial Market general Index fell by 1.8 per cent, led by Bahrain’s GFH, developer Emaar Properties and shariah-compliant lender Dubai Islamic Bank.

The Abu Dhabi Securities Exchange (ADX),  Bahrain Bourse and Saudi Stock Exchange (Tadawul) all recorded falls of 0.7 per cent.