European stock prices sharply fell this morning as investors are concerned about the decision of German authorities to ban ‘short-selling’ on certain stocks and bonds, with the banking sector under the most pressure.
The FTSEurofirst index of 300 leading European stocks dropped by 1.5 percent to 1,011 points by 9:30 AM, after rising 1.3 percent yesterday. The Frankfurt DAX, London FTSE, and Paris CAC indices were down between 1.7 and 2.3 percent around 9:30 AM. Yesterday, after the closure of European stock exchanges, German authorities announced a ban on the riskier practice of trading borrowed securities to prevent financial speculation, which they consider one of the main causes of the debt crisis in the eurozone. “Investors are disturbed by this decision. The question is whether other eurozone members will follow Germany,” says Stephen Pope, a strategist at Cantor Fitzgerald. The banking sector is under the most pressure. The STOXX Europe 600 index for this sector fell by 2.1 percent this morning. On the Tokyo Stock Exchange, the Nikkei index weakened by 0.5 percent to 10,186 points. (H)
