Declines comes as oil price falls more than 3% towards $27 a barrel, its lowest since 2003
Dubai and Abu Dhabi's bourses both tumbled more than 3 percent to 28-month lows on Wednesday, wiping out the previous day's rebound as investors cashed out on renewed worries over low oil prices and a global equity market rout.
Dubai's index plunged 4.6 percent, closing at 2,639 points.
The two most traded stocks on the bourse were contractors Arabtec and Drake & Scull, declining 7.7 and 9.5 percent respectively.
Abu Dhabi's bourse slumped 3.1 percent to 3,768 points, taking its 2016 losses to 12.5 percent. Three-quarters of traded stocks traded fell than 4 percent.
Small and mid-cap stocks were battered as local investors scurried to dump shares indiscriminately. Dana Gas, Abu Dhabi's most traded stock, plummeted 9.5 percent.
"The stock markets are fickle and vulnerable to sways in oil prices," said an Abu Dhabi-based trader. "Tuesday's rebound lost its bounce because we are back to the same macroeconomic worries which have plagued equity markets from the start of the year."
Crude futures slumped again in Asian trade on Wednesday, with US oil dropping more than 3 percent towards $27 a barrel and its lowest since 2003, while European shares slid to their lowest since October 2014.