Regional stock markets plunged on 27 August over fears of Western military intervention in Syria.

Dubai’s benchmark index fell 7.01 per cent, Abu Dhabi dropped 2.83 per cent, Qatar decreased 1.28 per cent and Saudi Arabia dropped 4.12 per cent.

The sell-off followed statements by the governments of the UK, the US and France signalling they could soon decide to intervene militarily in Syria, days after chemical weapons allegedly killed hundreds of residents in eastern Damascus.

It is the first time in months the regional stock exchanges have sharply declined. Over the past three months, optimistic investors brought most exchanges to overbought levels, confident that the economic recovery in the region was taking off. However, with trading dominated by retail investors, exchanges remain sensitive to impulsive trades and volatility.