Shares, commodities and European currencies fell sharply in early afternoon deals with traders saying rumours that European governments are ready to impose a Europe-wide ban on some riskier trading practices had caused 'panic' across trading floors.
Yusuf Heusen, senior sales trader at IG Index said: 'There is talk of a Brussels blanket ban. Any rumour at the moment is going to lead to exaggerated moves.'
Yesterday, shares dropped after shock news Germany has banned some riskier forms of trading in financial shares and government bonds until March next year to try and restore order to global markets.
Today, traders noted rumours coming from Brussels that other European markets will also ban so-called naked short-selling.
A spokeswoman from Belgium's financial market regulator CBFA said the agency is in talks with other national regulators through the Committee of European Securities Regulators about whether all EU countries should follow suit, according to the Wall Street Journal.
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