Short selling of Portugal’s top banks banned

A BRITISH regulator issued a ban on short-selling three Portuguese stocks yesterday, after volatile trading, prompted by uncertainty about the country’s coalition government.

The Financial Conduct Authority (FCA) instructed that a temporary restriction would be in place until midnight yesterday, on Banco Comercial Portugues, Banco Espirito Santo and Sonae Industria. Portugal’s regulatory body also issued a number further controls.

The ban came in the wake of a crisis in the Portuguese government. Earlier in the week, the country’s finance minister resigned, followed by the foreign minister, who is also the leader of the government’s junior coalition party.

However, Portuguese Prime Minister Pedro Passos Coelho insisted that an agreement for continuity had been found yesterday.

Portuguese 10-year government bond yields rose to the highest level seen in 2013 as the crisis unfolded, and the country’s stock market fell to its lowest point this year.

Portugal is in the middle of a protracted recession, and has missed the targets set by its international creditors to reduce its deficit.