LONDON — Investors were left in limbo for four hours Friday as the London Stock Exchange halted trading because of a technical glitch - the latest failure for the bourse as it implements a new system.
The exchange suspended dealings shortly after opening, blaming issues with market data technology just two weeks after it introduced its new Millennium platform.
It restarted trading shortly after midday, with exchange Chief Executive Xavier Rolet expressing “sincere regret” at the inconvenience caused.
The apology did little to appease many traders on what was expected to be a busy morning, after the release of data showing that Britain’s economy was faring worsethan previously thought and during ongoing volatility on world markets stemming from the unrest in Libya.
The failure is the latest in a string of blackouts caused by technical glitches at the exchange in recent years - including a full-day shutdown in September 2008 and a 3 1/2-hour knockout in November 2009 - and comes just days after Borsa Italiana, the London exchange’s Milan platform, was hit by a five-hour blackout.
“Traders ... will undoubtedly be venting fury this morning at the LSE,” said Joshua Raymond, market strategist at City Index. “At a time of uncertainty in the markets, where traders are having to keep on their toes with the situation in Libya, the last thing they need is an unexpected halt to trading.”
David Buik, markets analyst at BGC Partners, said the shutdown was “very frustrating as London vies to remain the financial capital of the world.”
Buik noted that the London exchange also has a good deposit receipt business with countries such at Russia - some 9 million shares were traded in oil company Rosneft by midmorning.
“London would have had a good cut at that,” he said. “Sadly, all this business went to Moscow.”
Rolet has led the push for new technology to give the London exchange an edge in the face of increasing competition from the likes of Chi-X Europe and BATS Europe. In one positive for the London exchange, trade on those platforms remained light during the shutdown, suggesting itremains the premier European bourse.
The exchange has also looked to global consolidation to increase its scale, earlier this month unveiling plans to merge with Canada’s TMX, which operates the Toronto Stock Exchange.
“It is unfortunate for the LSE Group that lightning has struck twice in the same week,” said Hirander Misra, who helped found Chi-X Europe and is now chief executive officer of Algo Technologies Ltd., which offers clients exchange data and access. “Systems are not infallible and outages do occur, however it is essential for any primary market trading system to have a high level of up time.” Information for this article was contributed by Nandini Sukumar of Bloomberg News.
Business, Pages 25 on 02/26/2011