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French regulators have banned short-selling on the Paris bourse for a month, extending an initial one-day halt, in an effort to curb the impact of the coronavirus outbreak which has battered markets around the world.

In an announcement late Tuesday, the Financial Markets Authority (AMF) said it had “decided to prohibit with immediate effect the creation of any new short positions or any increase in existing short positions.”

The ban runs until April 16, it added.

Investors use short-selling to bet the market will fall, putting tremendous downward pressure on prices.

This in turn can easily turn into a rout at times of great uncertainty and volatility — as seen in the coronavirus outbreak — with markets posting massive losses as a result.

On Tuesday, the AMF said it was banning short-selling in 92 stocks for the day but the government said later that it was likely to be extended for a month.

The Paris market, like its peers, has been on a vicious rollercoaster ride as sentiment veers sharply on every new news lead on the crisis which now has its epicenter in Europe where cases, led by Italy, are rising fast.

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