London share prices soar as short-selling is banned

Share prices within minutes of opening in London soared, with FTSE 100 index gaining more than 300 points in early trading. Investors have high hopes that the US government will rescue any bank that’s in distress and with the UK implementing the SHO regulation banning short-selling it all looked a much brighter picture in the city.

The news last night that the US Treasury and the country’s central banks are putting a government sponsored firm together that’s been codenamed “bad bank”, would clean up the banking system and take control of toxic financial assets set Wall Street rocketing up by more than 400 points.

America is hoping that this action will stop the contagion that started last year with the collapse of Bear Stearns and had a catastrophic affect this week on the financial markets.

The “bad bank” will be a vehicle to lancing the boil of bad property related assets that causes banks to stop lending to one another and leading to the aggressive shorting that has already claimed some high profile names.” Said Rob Carnell at ING Financial Markets

Both Lloyds TSB and HBOS shares rose up around 26 percent as the banks agreed on a merger deal.

Read the full article in the Guardian