FTSE recovers after Euro short-selling ban lifts investors

Updated: The FTSE 100 got off to a weak start on Friday but stablised by mid-morning following efforts in several European countries to calm volatility in share trading.

London's leading index dropped 60 points in the first minutes of trading but, as of 11am, sat 90 points higher at 5,252.

France, Italy, Spain and Belgium today introduced a ban on 'short-selling' financial stocks in a bid to restore investor confidence.

It followed days of volatile trading sparked by fears over European debt and, in France in particular, the stability of the banking sector.

The last time major Western countries made a similar move was in 2008 after the collapse of Lehman Brothers.

European markets are also higher. The French Cac 40 added 2.25% to 3,159 despite the publication of figures showing French economic growth had stalled completely in Q2.

According to the data, French GDP levelled off to 0.0% in between April and June following a 0.9% rise in the first three months of the year.

Earlier, the euro weakened to $1.4156 at 8:15 am in London, from $1.4241 yesterday in New York and $1.4282 a week ago.

Overnight in the US, the S&P 500 and Dow shot higher, reversing much of Wednesday's losses.

The S&P 500 rose 4.6%, to 1,173 points, while the Dow jumped 423.4 points, to 11,143.3, as investors took heart from lower jobless claims figures.

They showed the number of people in the US filing for unemployment for the first time dipped below 400,000 for the first time in four months, providing some much needed respite for markets.

Gains in the US helped lift Asian shares, with China's Shanghai Composite also up 0.58% to 2,596 points.