France, Italy, Spain extend short-selling bans
Bans on short-selling stocks in France Italy and Spain have been extended, the European Union’s capital markets watchdog has said.
The Italian and French bans will remain until November 11, while the Spanish curbs would remain until market conditions changed, the European Securities and Markets Authority (ESMA) said in a statement.
The three countries introduced the bans on August 12 in a bid to curb wild swings in stock markets. They were extended later that month and were due to expire at the end of September.
Belgium also introduced a ban in August but it has no expiry date and remains in place.
Short-selling is a common way for hedge funds and other investors to bet on falling share prices, whereby traders borrow stocks to sell them in the hope of scooping them up later at a lower price and pocketing the difference.
The ban, however, failed to stop a rout in French bank stocks amid investor fears over their exposures to a possible default in Greek government debt.
Greece also has curbs in place on short-selling.
EU member states like the UK, the bloc’s biggest share trading centre, have refused to join the ban.
Italian market regulator Consob said it would continue to coordinate with other European watchdogs to assess future action, which may include lifting the ban if market conditions allow.