Financial shares soar after short selling ban

The lucky 29 named and saved by the City regulator have seen their share prices soar this morning.

The temporary ban on short selling of a group of financial stocks announced by the FSA last night after the market closed has had an immediate effect, as short sellers rush to close their books. If not, they will have to declare their positions on Tuesday and run the risk of becoming public pariahs.

It was already becoming clear before the ban that some investment banks were increasingly reluctant to lend out stock for investors to short, given the growing clamour - rightly or wrongly - about the shorters forcing HBOS into its rescue merger.