European stocks failed to rally significantly this morning after a ban on short selling in four pivotal Eurozone nations failed to stem the tide of losses seen over the week.
The assault on short sellers, triggered by a collapse in confidence in banks including Societe Generale, had been hastily introduced in an attempt to stop the rot in markets.
However the Financial services Authority today reasserted its view that there should not be a UK ban.
In early trading the FTSEurofirst 300 index of top European shares was down 0.9 per cent at 926.57 points. Societe Generale was down 2.4 per cent and Santander fell 1.2 per cent.
London's blue chip index also saw volatility as the Eurozone crisis continued to suck the confidence from investors who were also eyeing the stalling recovery in the US.
Chip maker Arm Holdings was down 2.7 per cent while AMEC dropped 1.5 per cent. Software group Autonomy dipped by 1.4 per cent while oil services group Wood lost a similar amount.
Retailer Next nudged down by around 1.3 per cent.
Three out of the FTSE 100's top five climbers were banks. Barclays was up more than two per cent, RBS 1.4 per cent and Lloyds 1.2 per cent.
Satellite navigation company Inmarsat was number one, rising by more than four per cent following an upgrade by Citi Group yesterday. Engineer Rolls-Royce was another significant mover, up two per cent.
Meanwhile on the FTSE All-Share Trinity Mirror was up more than eight per cent after posting strong results helped by the closure of rival title the News of the World.
Asian markets were hit by more volatility with the Hang Seng in Hong Kong closing slightly up while the Nikkei edged down.
In the US later investors will be looking at July retail sales figures