Emaar's loss was its biggest single-day loss in about eight years.

The Abu Dhabi Securities Exchange, the other market in the United Arab Emirates (UAE), fell 4.7 per cent to 3,769.84 points.

The drop was also due to a fall in the real estate sector, which reduced by nine per cent.

Credit crunch

As well as the real estate falls, the two markets were said by analysts to be significantly affected by the reported withdrawal of billions of dollars by foreign investors because of the global credit crunch.

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Uncertainty in Gulf markets

In Qatar, the Doha Securities Market ended the day down seven per cent at 8,664.46 points, while Oman's Muscat Securities Market fell 2.8 per cent.

Kuwait Stock Exchange, the second largest in the Arab world, lost 3.6 per cent to close on 12,379.00 points, sliding below the 2007 close for only the second time this year.

Hashem Ahelbarra, Al Jazeera's correspondent at the Doha Securities Market, said that the US' $700bn economic bailout plan had failed to bolster confidence in the Gulf as yet.

"Here morale is very low among investors, who are desperate for an exit strategy," he said.

Nadine Wehbe, a market analyst with Orion Brokers in Dubai, told Al Jazeera: "We are still going strong in this part of the world. A lot of commercial banking is still up and strong. A lot of mortgages are still up and strong."

Wehbe said that the principle cause of the global financial crisis was the sub-prime (high-risk) mortgage market and that the Gulf region had a relatively low number of sub-prime mortgages, at 60 to 65 per cent of house loans.

She said that the real estate sector in the UAE would return to a regular business cycle, unlike the US real estate market.

The stock market in Saudi Arabia will reopen on Monday.