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European markets slide after German ban on short-selling

European markets fell late Thursday morning over fears that other EU countries may follow suit on Germany's short-selling ban.

By Reuters London markets teamReuters / May 20, 2010

A woman hangs a European Union flag at the residence of the Spanish Ambassador in Athens, Wednesday. World markets slid Wednesday while the euro hovered near four-year lows against the dollar after Germany announced new curbs on traders, including a ban on short-selling some kinds of shares, in a unilateral attempt to shore up the ailing euro and prevent the continent's debt crisis from getting out of control.

Thanassis Stavrakis/AP

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London

European stocks fell late on Thursday morning on persistent concerns that other European countries may follow Germany's footsteps to ban short-selling in some financial instruments, traders said.

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"There is a rumour of the short selling ban being extended in the euro zone," a trader said.

However, French Economy Minister Christine Lagarde confirmed earlier that France would not be following a German move to ban the naked short-selling of sovereign debt.

German government bonds turned positive as stocks fell, with the June Bund futures FGBLc1 up 9 ticks on the day at 127.56, while cash yields fell.

At 1054 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.6 percent at 990.81 points.

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