Saudi Arabia, the United Arab Emirates (UAE) and Bahrain withdrew their ambassadors from Qatar on Wednesday in an unprecedented split between the Gulf Arab allies who have fallen out over political turmoil shaking the Middle East.

Qatar's stock market tumbled 2.3 percent after Wednesday's announcement. There is significant cross-border investment in the stock markets of GCC countries by investors from other GCC nations; Saudi investors play a major role in all GCC markets.

The statement follows two years of efforts by Saudi Arabia to build a closer union between the GCC countries on foreign and security policy in an effort to cement a united front against what it sees as Iranian aggression.

Saudi Arabia and the UAE are fuming especially over Qatar's support for the Muslim Brotherhood, an Islamist movement whose political ideology challenges the principle of dynastic rule, and by its playing host to its spiritual leader Yusuf Qaradawi.

The Saudi-UAE-Bahraini statement said GCC foreign ministers had met in Riyadh on Tuesday to try to persuade Qatar to implement the agreement.

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