March 13 (Reuters) - Italy and Spain have both issued bans on short-selling of dozens of stocks, after European stock exchanges posted their worst ever losses on Thursday.
Spain’s regulator said late on Thursday that the ban would apply to 69 stocks, encompassing all liquid shares whose price fell more than 10% on Thursday, and all illiquid shares that fell by more than 20%.
In Italy the ban will apply to 85 stocks.
Spain’s IBEX-35 index dropped 14.06% on Thursday, while the Milan stock market plunged 17%.
Short-sellers borrow shares and immediately sell them, betting the price will fall before they buy back the shares and return them, pocketing the difference.
Many countries banned short-selling to some degree during and just after the 2008 financial crisis. (Reporting by Valentina Za and Nathan Allen; writing by Rachel Armstrong; editing by Jason Neely)
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