The Abu Dhabi Securities Exchange and the Dubai Financial Market are halving the limit that causes trading to cease once losses hit a specified level.
The companies operating both bourses said the loss thresholds triggering a stop to trading was reduced to 5 per cent, from 10 per cent, on instructions from the the Securities and Commodities Authority.
The limits will be imposed with immediate effect from Wednesday morning's opening.
"DFM always keeps a close eye on market developments and activity to take all the necessary actions to contain fluctuations, especially the recent fluctuations due to the coronavirus," said Essa Kazim, the DFM chairman.
"Today’s measure is a result of DFM and SCA’s joint efforts to contain these fluctuations."
ADX said that the down limit could be extended to 7 per cent for some stocks, depending "on a criteria determined by ADX and approved by SCA".
Both markets retain a stop limit on gains at 15 per cent.
The halving of the limit at ADX is "in line with solid principles of rebalancing trade so that trading activities are less impacted by the current global viral outbreak", said its chief executive, Khalifa Al Mansouri.
"This will support a stable investment climate underpinned by robust and stable foundations for all companies listed on ADX."
Similar action was made by Boursa Kuwait on Saturday after the Kuwait Premier Market hit a 10 per cent down-limit three times in the two weeks before.
Its down limit stops trading for a brief period while an auction takes place to settle on new levels.
Fears of a recession as governments take drastic measures to contain the spread of the coronavirus has caused turmoil in markets around the world.
The Dow Jones index in the US had its biggest one-day drop for more than 30 years in Monday's trading session.
Investors are also concerned about the effect of falling oil prices, with Brent crude slipping below $30 per barrel for the first time in four years on Tuesday.
By close on Monday, the Dubai Financial Market had declined in value by 33.4 per cent since the start of the year.
The Abu Dhabi main index was 30.1 per cent lower, according to data from Kamco Research.
Both markets also finished in the red on Tuesday, with ADX falling a further 6.3 per cent and DFM 5 per cent.
