European stockmarkets all did badly on Wednesday as fallout from the German decision to restrict trading hurt markets everywhere. All were down by two pecent or more, with Milan losing more than 3.5 percent as traders expressed disbelief at the German move, saying it was confusing and populist and would add fuel to the flames under the euro rather than calm things down. They also said it indicated a lack of cohesion in EU policy.
“To ban short selling only makes sense, if you do it in many countries, at least in the European Union, so that you cannot migrate to France or Italy to sell short. It would be even more efficient, if you could get the British, the Americans and Chinese on board, otherwise speculation against the euro won’t stop,” says Baader Bank’s Robert Halver.
Predictably banks took the biggest hit, and commodities followed. Traders said volatility would continue, and that other ways would be found to short sell, getting round the German ban.