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European markets lower as short-selling ban comes in European markets lower as short-selling ban comes in
(40 minutes later)
European stocks have slipped as the latest move to restore market order - a ban on short-selling of some financial shares - takes effect. European stocks slipped at the open as the latest move to restore market order - a ban on short-selling of some financial shares - takes effect.
Overnight, four eurozone countries - France, Italy, Spain and Belgium - banned short-selling of some stocks in an attempt to stabilise markets.Overnight, four eurozone countries - France, Italy, Spain and Belgium - banned short-selling of some stocks in an attempt to stabilise markets.
London's FTSE 100 share index fell 1%, Germany's Dax was 1.8% lower and France's Cac was down 1.6%. London's FTSE 100 share index initially fell 1%, Frankfurt's Dax was 1.8% lower and Paris's Cac was down 1.6%.
But the FTSE 100 and Dax soon recovered to trade flat, with only the Cac lower.
Earlier, Asian stocks were mixed after after a week of extreme volatility.Earlier, Asian stocks were mixed after after a week of extreme volatility.
Short-selling involves investors selling stocks they do not own in the expectation they will drop in price before buying them back and pocketing the difference.Short-selling involves investors selling stocks they do not own in the expectation they will drop in price before buying them back and pocketing the difference.
The last time major Western countries made a similar move was in 2008 after the collapse of Lehman Brothers prompted the US and the UK to curb the practice.The last time major Western countries made a similar move was in 2008 after the collapse of Lehman Brothers prompted the US and the UK to curb the practice.
Both countries' market authorities said they had no plans to introduce another ban.
Temporary relief?Temporary relief?
Investors remain wary of investing while deep fears about eurozone and US debts remain.Investors remain wary of investing while deep fears about eurozone and US debts remain.
Experts were not convinced the new short selling ban would do much to restore market order and confidence.Experts were not convinced the new short selling ban would do much to restore market order and confidence.
"While the ban on short-selling equities may support share prices for a day or two, unfortunately it is highly unlikely to prevent a further sell-off in equities," said Manoj Ladwa at ETX Capital."While the ban on short-selling equities may support share prices for a day or two, unfortunately it is highly unlikely to prevent a further sell-off in equities," said Manoj Ladwa at ETX Capital.
Earlier in the week, South Korean authorities also banned short-selling of shares to try and stem losses. The country's Kospi index has seen some of the biggest falls globally in the past week.Earlier in the week, South Korean authorities also banned short-selling of shares to try and stem losses. The country's Kospi index has seen some of the biggest falls globally in the past week.
The short-selling ban is the latest in a series of moves by policymakers in Europe and the US to allay fear in the markets.The short-selling ban is the latest in a series of moves by policymakers in Europe and the US to allay fear in the markets.
On Sunday night, the European Central Bank said it would buy bonds from Italy and Spain after emergency talks on the debt crisis.
  • On Sunday night, the European Central Bank said it would buy bonds from Italy and Spain after emergency talks on the debt crisis.
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  • On Wednesday, the US Federal Reserve said it would keep interest rates at current levels until at least 2013.
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  • Also on Wednesday, the French government held an emergency session to discuss the crisis amid rumours - denied on all sides - that it could lose its top-ranked credit rating.
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  • And on Thursday, the Italian government outlined its plans for deficit reduction before the French President Nicolas Sarkozy and German Chancellor Angela Merkel said they would meet to discuss eurozone financial governance.
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On Wednesday, the US Federal Reserve said it would keep interest rates at current levels until at least 2013.
Also on Wednesday, the French government held an emergency session to discuss the crisis amid rumours - denied on all sides - that it could lose its top-ranked credit rating.
And on Thursday, the Italian government outlined its plans for deficit reduction before the French President Nicolas Sarkozy and German Chancellor Angela Merkel said they would meet to discuss eurozone financial governance.
But some investors are sceptical about the effectiveness of the steps taken by governments and central banks to prevent a loss of confidence.But some investors are sceptical about the effectiveness of the steps taken by governments and central banks to prevent a loss of confidence.
"These are the people who got us into these situations and now we're realizing they don't know what they are doing. The market's finally catching up," Jim Rogers of Rogers Holdings told the BBC's Asia Business Report."These are the people who got us into these situations and now we're realizing they don't know what they are doing. The market's finally catching up," Jim Rogers of Rogers Holdings told the BBC's Asia Business Report.
On Friday, Japan's main index closed down 0.2%, South Korea's lost 1.3% but Hong Kong was up 0.9% towards the end of its session. On Friday, Japan's main index closed down 0.2%, South Korea's lost 1.3% but Hong Kong was up 0.13% towards the end of its session.
Wall Street's main Dow Jones index ended up 3.9% on Thursday, helped by data showing a fall in the number of unemployment claimants.Wall Street's main Dow Jones index ended up 3.9% on Thursday, helped by data showing a fall in the number of unemployment claimants.