Proactive Investors UK – The top thirty gainers for the London Stock Exchange (‘LSE’) read out like a roll call for the British and Irish financial industry, after the Financial Services Authority (‘FSA’) announced late last night that it was imposing a temporary ban on short selling financial stocks. Groups with short positions over 0.25% in the 29 companies included in the ban will have to declare their positions by Tuesday.
Not surprisingly, the FTSE 100 roared to life this morning, climbed a whopping 340 points, or 7.1% to 5225 by 10:30am, the biggest single day gain in more than two decades. The surge higher was lead by financial institutions, which have been offered a temporary reprieve from the usually lucrative tactic by hedge funds to short sectors out of favour with the market. Even large spread betting firms, like CMC Markets, informed private investors this morning that it was not accepting any new short bets on financial stocks, as under normal circumstances, it would hedge those bets, but can no longer do so.