On Thursday, the DAX closed with a gain of 3.28 percent after France, Spain, Italy and Belgium said they would ban the practice of short selling, when investors bet that share prices will fall, adding to downward pressures on the markets.

The speculative practice will be restricted from Friday to combat "false rumours" that have destabilised the markets, European regulators said.

The European Securities and Markets Authority (ESMA) said in a statement issued Thursday that the move was taken "to restrict the benefits that can be achieved from spreading false rumours or to achieve a regulatory level playing field, given the close inter-linkage between some EU markets."

Copyright AFP (Agence France-Presse), 2010