National regulators in France, Spain, Italy and Belgium will impose bans for at least 15 days on short-selling from today to stabilize markets after European banks hit their lowest level since the credit crisis. Despite claims that the bans were harmonised, France’s ban covers only the shorting of bank equities, but Spain’s includes all financial instruments such as credit default swaps. The FSA made it clear it would not follow suit in the UK, saying it “has no plans to introduce a short selling
Stocks rebounded yesterday as an unexpected drop in US jobless claims eased concern the world’s largest economy may slip into recession. A report showed first-time applications for jobless benefits fell to a four-month low of 395,000, compared with 405,000 that economists in a Bloomberg survey were expecting.
Asian stocks edged up in Friday morning trade as investors chased value picks after recent sharp volatility. The MSCI index of Asia Pacific stocks outside Japan was up 1.3%, but is still looking at a decline of around 3% on the week, in line with the MSCI world stock index.
European shares are expected to extend the previous session’s strong gains today, mirroring a surge in US stocks, with investors seen focusing again on macroeconomic fundamentals and bargain-hunters looking at beaten-down stocks.
THE EURO pared recent losses against the Swiss franc yesterday, and was up 5.5% against the franc last night, after a senior Swiss central bank official hinted that its currency could be pegged to the euro to prevent further appreciation. China’s yuan headed for the biggest weekly advance since December 2007 on signs China will favour a stronger currency to tame inflation, which accelerated to a three-year high in July.
Oil fell in New York, heading for a third weekly decline, on concern that volatility in financial markets will worsen an economic slowdown. Brent oil for September settlement on the London-based ICE Futures Europe exchange dropped as much as 0.8%, to $107.20 a barrel.
Gold fell for a second day, paring the best weekly advance since January 2009, as a rebound in equities and higher margins on futures encouraged sales after the metal’s rally to its highest ever above $1,800 an ounce. Food commodities prices surged after the US government slashed its forecast for the country’s crops due to the impact of a heatwave and drought.