Traders celebrated when trading was halted
The Kuwait stock exchange has been closed until 17 November following an unprecedented court order.
A local court ordered the closure after investors complained that the government was not doing enough to stem heavy stock market losses.
The emirate's stock exchange, the second largest in the Arab world, has fallen 43% since June.
Kuwaiti sovereign wealth funds have bought hundreds of millions of dollars of stock, but the slide has continued.
The central bank has also injected billions of dollars into the system in an effort to protect the Kuwait from the global financial turmoil.
The court's decision follows recent demonstrations and walk-outs by share traders.
A BBC correspondent said the government faced increasing calls to do more to protect the local economy from the effects of the global financial crisis.
One of the main Kuwaiti lenders, the Gulf Bank, is reported to have lost up to $1bn in failed derivative deals.
Other Middle Eastern markets have also been affected recently, with Saudi Arabia's stock market, the Arab world's biggest, having fallen by more than 40% since the start of the year.
Analysts say investors in the Gulf are worried that the global financial crisis and the recent fall in oil prices could prompt governments to cut public spending - a main engine of the region's economies.