Shorting is back in fashion. Hedge funds, which had been fighting shy of short selling individual stocks are brushing up their skills in the hope of scoring big from a wave of profit warnings.

The shift by many hedge funds in recent months away from using indices to provide generic hedges back to picking losers follows the evaporation of private equity bids - and the losses they can create for short sellers. Previously the danger that a rumoured takeover would see share prices leap overnight had deterred many short sellers, who face potentially unlimited losses.