Europe hurting, short selling restrictions extended

High volatility in the markets led the Comisión Nacional del Mercado de Valores (CNMV) to announce, after markets had closed, an extension of restrictions on short selling shares related to the financial sector. The restrictions were put into place on August 11.

Still, the regulatory institution has not been the only one to extend the measure. Four more European countries (France, Belgium, Italy and Greece) are collectively extending it, but not for the same length of time.

Along with Spain, where the CNMV noted that the objective is to "do away with the measure as soon as market conditions allow," Italy has decided to disallow short selling until September 30. France will extend it even longer. Aligned with the CNMV, the organization that regulates the French stock exchange announced yesterday that it is resolved to extend short selling restrictions on French financial companies "until order is restored, but no farther than November 11." The third player, Belgium, never established an expiration date to begin with, so they have not had to ask for an extension.

The decision was announced at the close of markets after a day that sent markets into the red. Losses once again predominated in Europe. Morning gains were erased when the American stock exchange opened and could not rally as Steve Jobs announced his decision to step down as CEO of apple. Yet Warren Buffet gave a major boost to the financial sector by investing 5 billion dollars in Bank of America. The Ibex 35, which rebounded 1.3%, closed at 8,299 points after giving up 0.84% and 1,650 in trading volume.