Computer breakdown disrupts LSE trading

London: London Stock Exchange Group Plc, operator of the world's fourth-largest market, broke down on the biggest session for European equities in nine months, hurting clients who trade an average $17.5 billion a day.

Trading resumed at 4pm after an earlier computer failure left clients unable to buy or sell shares for about seven hours, according to the LSE's website.

About 352 million shares, worth about $2.5 billion, changed hands in the first hour of trading before the halt, more than twice the amount in the same period a week ago, sending the FTSE-100 index up as much as 3.8 per cent.

The breakdown left traders in Europe's financial capital in limbo as equities around the world rallied on the US government's takeover of mortgage lenders Fannie Mae and Freddie Mac.

The LSE, Europe's oldest independent exchange, said attempts to fix its biggest computer failure in more than eight years was "taking longer than expected.''

"The LSE will come out of this very, very badly,'' said Omer Bhatti, head sales trader at WorldSpreads Group Plc in London. "People will begin to think seriously about having alternatives.''

LSE faces competition from as many as seven new competitors, among them Chi-X Europe and Turq-uoise, an electronic market backed by nine investment banks. Chi-X, which started in March last year and now accounts for about 18 per cent of trading in FTSE 100 shares across exchanges, said it handled trades all day. "Many traders will feel morally cheated that they have been unable to conduct their business in response to today's financial news,'' said David Buik, a London-based market analyst at BGC Partners. "The fact that it happened beggars belief.''

The LSE shut for almost eight hours on April 5, 2000, after a problem with the London Market Information Link, a computer system used to connect the exchange with data vendors.