DUBAI (AFP) - Stock markets in Dubai and neighbouring Abu Dhabi closed sharply lower on Monday, shedding 7.3 percent and 8.3 percent respectively, hit by a lack of buyers after Dubai Worlds shock proposal to suspend debt payments. Dubais benchmark DFM Index closed at 1,940.36 points, down 152.80 points from Wednesday, just before Dubai announced it wanted to freeze debt repayments by its huge, wholly owned and unlisted Dubai World conglomerate for at least six months. Leading securities, particularly in the construction and finance industries, plunged almost by the maximum-allowed limit of 10 percent after the bourse reopened following a four-day holiday. The bourse in oil-rich Abu Dhabi dropped 8.31 percent to 2,668.23 points. The two markets have shed around 10 billion dollars of their market capitalisation. Trading almost froze in both markets, with heavy sell orders and almost no offers to buy. The Dubai market registered only 37.5 million dirhams (10.2 million dollars) in turnover around 10 percent of the average daily trade this year. This was expected because markets have panicked over exaggerated reports in the Western media, Al-Fajr Securities analyst Hamam al-Shamaa told AFP. We expect to see many foreign portfolios withdrawing from the market. Their exit obviously terrifies local investors, he said, adding that the drop will continue on Tuesday. I do not expect investors to enter the market. Tomorrow will most likely be a similar day, he added, while pointing out that the markets go into another four-day holiday starting Wednesday. But he expected local markets to bounce back when they reopen after the break. I expect good news during the holiday, he said. In Dubai, the shares of giant property developer, Emaar, took a severe beating, shedding 9.86 percent. Dubai Islamic Bank lost 9.96 percent. Other sectors were also affected, with the shares of the budget airline Air Arabia plunging by 9.62 percent. Meanwhile, Dubai World property unit Nakheel, builder of the iconic Palm Jumeirah artificial island and which is also unlisted, added to the gloom by asking to suspend trading of its sukuks, or Islamic bonds, on the Dubai-based NasdaqDubai exchange. One of the key loans affected by Dubai Worlds planned debt moratorium is a Nakheel issue of 3.5 billion dollars of sukuks, scheduled to mature on December 14. Securities listed by port operator Dubai World unit DP World fell 14.88 percent on NasdaqDubai exchange and were the most active, according to NasdaqDubai website. Investors failed to draw reassurance from the UAE central banks announcement on Sunday that it was providing additional liquidity to banks in the United Arab Emirates. While we expect Central Bank to continue supporting the sector going forward, we believe the focus over the coming period will be on closely monitoring developments in the Dubai debt issue, said economist Monica Malik from EFG-Hermes investment bank in statement Monday.> Dubais announcement sent shock waves around the world on Thursday and Friday as investors feared a possible default by Dubai and its state-owned businesses, which together owe an estimated 80 billion dollars. However, Asian markets rallied on Monday, with Hong Kong surging 3.25 percent and Tokyo soaring 2.91pc. European markets remained edgy with Frankfurt falling 0.45 percent, London sliding 0.53 percent and Paris shedding 0.65 percent late morning, with all three markets reversing opening gains in highly volatile trade. The Egypt Stock Exchange too was buffeted, dropping 6.78 percent in just over an hour, with one stockbroker describing the slide as the most serious drop recorded in a long time. Dubai and Abu Dhabi were the only Gulf stock markets open on Monday. Kuwait follows on Tuesday and Saudi Arabias financial market, the largest Arab bourse in capitalisation, will remain on holiday until Saturday. Dubai does not have big oil reserves, unlike Abu Dhabi which sits on around 95 percent of the UAEs crude deposits and runs the worlds largest sovereign wealth fund valued by analysts at 400 to 500 billion dollars. Two Abu Dhabi-controlled banks subscribed to Dubai bonds worth five billion dollars in a deal announced a few hours before Dubai revealed its debt problems. But doubts have been growing about Abu Dhabis commitment to buoy Dubai, whose growth came to a screeching halt amid the global credit crunch before going into reverse gear. Property prices in the once-booming desert city have slumped by 50 percent from their peak.