Stock markets in the United Arab Emirates saw a rough start to the trading week this Monday, with both the Dubai and Abu Dhabi exchanges shedding more than one percent in early sessions. This downward momentum follows reports that the UAE military intercepted two Iranian drones on Sunday, while a third drone impacted an area near the Barakah nuclear power plant. The instability has rattled investor confidence, causing widespread selling across various sectors as traders weigh the potential for increased regional volatility.

The Dubai Financial Market (DFM) slipped by 1.17 percent to reach 5,639.7 points, with notable declines in major stocks like Emaar Properties, Amlak, and Tecom. Similarly, the Abu Dhabi Securities Exchange (ADX) mirrored this 1.17 percent drop, settling at 9,559 points, heavily pressured by losses in Insurance House and Burjeel. Beyond local security concerns, market sentiment was further dampened by intensifying geopolitical rhetoric, specifically comments from U.S. and Iranian officials regarding the Strait of Hormuz, which have cast significant doubt on any near-term resolution to ongoing maritime security disputes.