Short selling ban lends support

The Athens bourse tumbled five percent yesterday, along with plummeting European peers, prompting authorities to ban short selling of shares on the Greek market. The benchmark general index ended down 5.23 percent, trimming mid-session losses of nearly 10 percent, to end at 2,372.09 points. Greek equities lost 15 percent this week as the global credit crisis deepens, dragging down markets on both sides of the Atlantic. In late trade yesterday, Germany’s DAX and London’s FTSE were both off more than 8 percent while France’s CAC was 7.65 percent in the red. Among the session’s biggest losers in Athens were Piraeus and Alpha banks which both shed more than 8 percent. Former state telecoms monopoly OTE also slumped 7.05 percent to 9.76 euros. Turnover reached 377.2 million euros versus 241 million euros in the previous session. The health sector outperformed, falling 2.41 percent. Authorities decided to ban short selling, in a move made effective immediately, after having already tightened rules last month in line with other regulators clamping down on speculators. «The board of the Hellenic Capital Market Commission in an emergency meeting today decided to ban short selling with immediate effect,» the regulator said in a statement. The ban will last through to the end of the month. Short-sellers try to profit from falling prices, borrowing stock in the hope of replacing it later at a lower price. Analysts are reluctant to forecast future price movements of stocks, pointing out that the next two support levels are at the 2,250- and 2,000-point marks. «In the short term, of course, it is too risky to make any forecast but markets have been under excessive pressure and at any time an equally violent upward reaction can begin,» commented Emporiki Bank in a weekly note.