Technical glitch halts LSE trading

A major technical glitch at the London Stock Exchange left investors frustrated today after trading was suspended for more than four hours.

The LSE blamed market data technology issues for the outage, which saw dealings halted before the opening bell and not return until 12.15pm, delivering an embarrassing blow to the LSE's new systems - introduced last week.

Angry investors were unable to react to full-year results from Lloyds Banking Group and key economic news in the UK as the latest GDP data showed a 0.6% contraction in the fourth quarter of 2010, worse than the 0.5% initial estimate.

The LSE's system woes also come during one of the most turbulent weeks for stock markets amid the Libyan political crisis and surging oil prices.

It is the latest in a string of technical problems experienced by the exchange, coming in the same week that Borsa Italiana - the LSE's Milan platform - suffered a five-hour outage.

Xavier Rolet, chief executive of the LSE, said: "We sincerely regret the inconvenience that today's disruption to trading has caused our customers."

But the City was less than impressed by the latest bout of disruption involving the LSE.

Joshua Raymond, market strategist at City Index, said: "It's yet another glitch to trading and traders, who still remember the same issues that halted trading for some three hours in 2009, and they will undoubtedly be venting fury this morning at the LSE.

"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."

The FTSE 100 Index rose nearly 1% soon after LSE finally resumed trading, although Lloyds dropped 4% as investors were spooked by comments that the slower UK economy and higher funding costs will prevent growth in net interest margins this year.

The LSE's new Millennium Exchange trading system has suffered a spate of teething problems since it was first introduced in the group's smaller Turquoise platform last October.

Trading was suspended for two hours on Turquoise in November, following glitches on the second day of operation.

It is also thought the LSE is facing claims that technical problems meant prices were not correctly displayed for some traders last week.

Today's technical difficulties present a headache for the LSE as it comes under pressure from increasing competition.

Mr Rolet, who took over as chief executive last May, has led the push for new technology to improve the exchange in the face of rivalry from the likes of Chi-X Europe.

Meanwhile, the LSE has been joining forces globally in a bid to increase its scale and might. It unveiled a deal to merge with Canada's TMX, which operates the Toronto Stock Exchange, earlier this month.