Spain Lifts Short-Selling Ban on Stocks After IBEX 35 Rallies

Spain lifted a ban on short-selling stocks as the benchmark IBEX 35 Index (IBEX) rallied and the country’s banks took steps to repair their balance sheets.

Authorities won’t extend restrictions that expired today, the stock market regulator, known as CNMV, said in an e-mailed statement today. Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice some politicians and investors blame for roiling markets.

After implementing the deepest austerity measures in decades, Spain “is sowing the seeds of growth,” Economy Minister Luis de Guindos said at a discussion forum in Davos, Switzerland, last week. The country is “fully on track to grow again,” he said.

Spanish lenders have been booking costs to comply with government orders to recognize losses on real estate that piled up on their balance sheets as Spain’s property boom turned to bust. The IBEX 35 has surged 40 percent since last year’s low on July 24, compared with a 15 percent gain in the Stoxx Europe 600 Index.

To contact the reporters on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net; Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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