The decline was across the board on almost all of the region’s seven bourses, as investors went into a panic sell-off soon after trading kicked off.
Dubai’s benchmark DFM Index lost 6.2 percent to 3,373.51 points, pulled down by market leader Emaar Properties, which shed 8.0 percent, and construction giant Arabtec, which lost 7.2 percent.
The index shed 7.2 percent on Thursday.
Abu Dhabi Securities Exchange recovered slighty at mid-session, trading down 3.6 percent at 4,212.07 points with energy stocks declining 5.3 percent and the real estate and banking sectors also falling.
The Saudi Tadawul All-Shares Index, the largest in the Arab world, dipped 3.3 percent to 8,113.22 points, a 12-month low.
Leading the decline was the petrochemicals sector, with Saudi Basic Industries Co. SABIC losing 5.6 percent.
The main index on the Qatar Exchange, the second biggest bourse in the Gulf, dived 7.2 percent to 10,959.0 points, a level last seen in early January. Market leaders in banking and industry contributed to the slide.
Kuwait Stock Exchange deepened losses, losing 3.2 percent to 6,254.62 points, a 22-month low, despite the listing of VIVA, a third mobile phone operator 26 percent-owned by Saudi Telecom.
The Muscat Securities Market lost 2.72 percent to 5,649.49 points, while the Bahrain bourse was unchanged.
Global oil prices tanked Friday to fresh five-year lows after a gloomy crude demand downgrade from the International Energy Agency (IEA) and more weak Chinese economic data.
US benchmark West Texas Intermediate for January delivery plunged to $58.80 per barrel — the lowest level since May 20, 2009 — having already closed under the psychological level of $60 on Thursday.
Brent crude for January meanwhile slipped to $62.75 in morning London deals, striking a low point last witnessed on July 16, 2009.
The oil market — which has shed almost 50 percent since June — plumbed the latest lows after the Paris-based IEA slashed its 2015 demand outlook, despite plunging prices.
The six nations of the Gulf Cooperation Council — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates — depend heavily on oil revenues which make up around 90 percent of their total income. (AFP)