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SEOUL - SOUTH Korea's Financial Services Commission will ban the short-selling of shares until the end of the year, Yonhap reported on Tuesday, after US lawmakers rejected a US$700 billion (S$1 trillion) financial rescue plan.
The FSC also said it would lift the daily limit on share buybacks to 10 per cent from 1 per cent, Yonhap reported, as Seoul share markets braced for sharp falls at the 0000 GMT market opening after a huge slide on Wall Street on Monday.
Taiwan places more limits on stock short-selling
Taiwan's top financial regulator said it would place tighter limits on the short-selling of stocks in its latest effort to bolster the market battered by the US financial crisis.
The total amount of short-selling and security lending of stocks for any individual company cannot exceed 10 per cent of its outstanding shares, the Financial Supervisory Commission said in a statement late on Monday. The previous cap was 25 per cent, it said.
The regulator would also look into those spreading market talk intended to drag down stocks, the statement said.
Despite the latest move, Taiwan stocks opened sharply lower, following a Wall Street sell-off that saw the Dow Jones plunge 7 per cent after the US House of Representatives rejected a US$700 billion bailout package for the financial sector.
The main TAIEX share index was down 6.3 per cent 15 minutes into the trading session, while the battered financial sub-index was down 6.7 per cent.
Stock exchange rules limit losses for individual stocks to no more than 7 per cent on any given trading day.
At an early media briefing just after the market opened, Vice Premier Paul Chiu said the new limits on short-selling are the government's latest effort to stabilise the markets amid the larger global financial turmoil.
The government has also activated its National Stabilisation Fund, and asked lenders to show flexibility when healthy companies run into short-term financing problems.
'We're very confident in our economic fundamentals,' Mr Chiu said. 'We will be watching market movements very carefully.'
The Taiwan government said earlier this month its National Stabilisation Fund would buy shares below their previous closing prices, one of a series of measures to support the market.
The financial regulator also had said it would reimpose a ban on short-selling shares of 150 Taiwan companies below their closing prices in the previous session, following a similar move by the US government to support US stocks. -- REUTERS
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