Austria's financial markets watchdog bans short-selling until April 18

[VIENNA] Austrian financial markets regulator FMA banned short-selling on the Vienna stock exchange on Wednesday for a month to shield the equities market from volatility, after Austrian shares lost around half their value this year due to the coronavirus crisis

Short selling is a tactic used to bet that a stock will fall in price, with an investor borrowing shares in the hopes of buying them back later at a lower price and pocketing the difference.

"Speculative short selling can lead to considerable risks in the current exceptionally volatile global and Austrian market environment," FMA co-chiefs Helmut Ettl and Eduard Mueller said in a statement.

The executives stressed that the stability of the financial market has to be of major concern in the current situation. "This national measure is therefore unavoidable and appropriate," they said.

The ban took effect immediately and will be in place until April 18.

Some EU states, including France, Italy, Belgium, Spain and Greece, have introduced national curbs on short-selling while other countries in the bloc have held back.

Markus Ferber, a senior member of the European Parliament, called on the European Securities and Markets Authority to introduce a pan-EU ban on short-selling on Wednesday.

REUTERS