The London stock market has experienced its worst outage in eight years after a systems failure prevented trading in the shares of Britain’s biggest companies.
A software glitch struck the London Stock Exchange early on Friday, leaving investors unable to buy or sell shares for more than an hour and a half.
The benchmark FTSE 100 index, which contains the biggest companies listed in the City, and the medium-sized FTSE 250 index were affected.
Trading was due to begin at 8am but City workers were left in limbo until 9.40am as LSE technical staff battled to resolve the problem. Once the systems were brought online, the FTSE 100 edged into positive territory, gaining 23 points or 0.33% by late afternoon trading.
An LSE spokesman confirmed that the outage was the longest since 2011, when the market froze until lunchtime. It is the first time trading has been disrupted since June 2018, when the market failed to open for an hour owing to a software glitch. In 2008, a technical problem stopped trading on the stock exchange for most of the day, seven days before the collapse of Lehman Brothers on 15 September.
The exchange declined to reveal exactly what went wrong on Friday, blaming “a technical software issue”. A cyber-attack is not thought to have been responsible.
City workers had already endured a rough week. The FTSE 100 plunged to a six-month low on Thursday as recession fears swept the world’s stock markets, with the Dow Jones Industrial Average in New York delivering its worst performance of the year.
“Investors would have been yearning for a quiet Friday after a week of turmoil for the markets driven by recession fears,” said Russ Mould, investment director at AJ Bell.
However, Neil Wilson of Markets.com pointed out that such outages, although rare, were unavoidable. “Technical glitches are inevitable, frustrating as it is for everyone,” he said.
One trader, when asked whether there were any issues in trading or a backlog of orders, told Reuters: “It all looks fine.”
The systems failure comes at an embarrassing time for the LSE and its chief executive, David Schwimmer, who joined from Goldman Sachs last year. LSE has just agreed to buy the data provider Refinitiv in a $27bn (£22bn) deal that could create a UK-headquartered, global rival to Michael Bloomberg’s financial news and data business.
Speaking as the deal was announced this month, Schwimmer said it was a “rare and compelling opportunity to combine two world class businesses and create a global financial infrastructure leader”.
Fiona Cincotta, senior market analyst at City Index, cautioned that the LSE’s reputation as one of the most reliable stock exchanges in Europe is starting to be questioned.
“There is no hiding from this one, the two-hour delay to open is an embarrassment for LSE and raises plenty of questions over the group’s technology. The timing is pretty horrendous for LSE, just weeks after it sealed a deal to buy Refintiv, in its quest to become a global markets and information powerhouse,” she said.
