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| London stock market suffers worst outage in eight years - business live | London stock market suffers worst outage in eight years - business live |
| (about 1 hour later) | |
| Time for a quick recap | |
| A freak software glitch has stuck Britain’s stock market, preventing investors buying and selling stock in the biggest companies listed in London. The London Stock Exchange failed to open at 8am, as expected, with traders left twiddling their thumbs until 9.40am. | |
| Once trading finally began, London joined a relief rally sweeping Europe, and pushing stocks up in New York too after a brutal few days. | |
| European Central Bank policymaker Olli Rehn cheered investors, by predicting that the ECB would unleash a bold new stimulus programme next month. | |
| Hong Kong, though, has fuelled slowdown fears by reporting that its GDP contracted by 0.4% in April-June, worse than first thought. | |
| This helped to push more government bonds to record highs, sending borrowing costs lower; the entire Swedish yield curve is now inverted. | |
| In other news... | |
| The Turkish military pension fund Oyak has entered exclusive talks with the government to buy British Steel, in a rescue that could save more than 4,000 jobs. | |
| British Steel: provisional deal with Turkish bidder could save 4,000 jobs | |
| The boss of Cathay Pacific has resigned, after the airline faced heavy criticism from Beijing over employees’ involvement in the Hong Kong protests. | |
| Cathay Pacific boss quits after Hong Kong airport protests hit share price | |
| The blackout which struck Britain’s power network last week will be blamed on avoidable faults: | |
| National Grid blackout report expected to blame avoidable faults | |
| The New York Stock Exchange is showing the LSE how it’s done, by opening smartly, and bang on time. | |
| Shares are rising at the open, as traders try to put a rough week behind them. The Dow has gained almost 200 points, as the futures market predicted earlier, with the tech-heavy Nasdaq gaining 1%. | |
| No-one is immune to the kind of systems failures that hit the London Stock Exchange this morning, of course. | No-one is immune to the kind of systems failures that hit the London Stock Exchange this morning, of course. |
| Back in 2015, Bloomberg’s systems crashed for several hours - leaving traders unable to operate, and even forcing the UK government to delay a debt auction. | Back in 2015, Bloomberg’s systems crashed for several hours - leaving traders unable to operate, and even forcing the UK government to delay a debt auction. |
| The disruption was blamed on an “internal network error”.... but there was a rumour, alas never confirmed, that an IT worker had accidentally spilt a can of coke on a server. | The disruption was blamed on an “internal network error”.... but there was a rumour, alas never confirmed, that an IT worker had accidentally spilt a can of coke on a server. |
| The US stock market is expected to rally when it opens in an hour’s time (unless London’s tech gremlins scamper across the Atlantic and wreck more havoc). | The US stock market is expected to rally when it opens in an hour’s time (unless London’s tech gremlins scamper across the Atlantic and wreck more havoc). |
| The Dow Jones industrial average is up 230 points in the futures market - which would recover a chunk of Wednesday’s 800-point tumble. | The Dow Jones industrial average is up 230 points in the futures market - which would recover a chunk of Wednesday’s 800-point tumble. |
| US Opening Calls:#DOW 25807 +0.93%#SPX 2874 +0.91%#NASDAQ 7570 +1.15%#RUSSELL 1476 +0.96%#FANG 2482 +1.73%#IGOpeningCall | US Opening Calls:#DOW 25807 +0.93%#SPX 2874 +0.91%#NASDAQ 7570 +1.15%#RUSSELL 1476 +0.96%#FANG 2482 +1.73%#IGOpeningCall |
| Traders are citing hopes of a US-China trade war breakthrough, after Donald Trump said he hopes to speak with Xi Jinping soon. | Traders are citing hopes of a US-China trade war breakthrough, after Donald Trump said he hopes to speak with Xi Jinping soon. |
| But let’s not get carried away; as things stand, America will impose fresh tariffs on Chinese consumer goods next month, meaning Beijing will retaliate. | But let’s not get carried away; as things stand, America will impose fresh tariffs on Chinese consumer goods next month, meaning Beijing will retaliate. |
| Money is still pouring into the world’s government bond markets today, as asset managers look for a place of safety. | Money is still pouring into the world’s government bond markets today, as asset managers look for a place of safety. |
| Prices are hitting new highs, dragging yields (the rate of return on the debt) to fresh lows. | Prices are hitting new highs, dragging yields (the rate of return on the debt) to fresh lows. |
| Germany’s 10-year bund yield, for example, just hit minus 0.72% for the first time ever -- meaning investors are prepared to lose money to lend to Berlin for a decade. | Germany’s 10-year bund yield, for example, just hit minus 0.72% for the first time ever -- meaning investors are prepared to lose money to lend to Berlin for a decade. |
| They’ll be calculating that the European Central Bank’s forthcoming stimulus package will drive bond yields even lower, as the ECB will create new money to buy bonds with. | They’ll be calculating that the European Central Bank’s forthcoming stimulus package will drive bond yields even lower, as the ECB will create new money to buy bonds with. |
| Sweden is also benefitting -- its 20-year bond yield has just tumbled below 0%. That means the entire Swedish bond yield curve is negative (longer-dated debt is yielding less than short-dated bonds). | Sweden is also benefitting -- its 20-year bond yield has just tumbled below 0%. That means the entire Swedish bond yield curve is negative (longer-dated debt is yielding less than short-dated bonds). |
| That shows investors are pessimistic about growth prospects, having noticed that Sweden’s economy contracted in the last quarter. | That shows investors are pessimistic about growth prospects, having noticed that Sweden’s economy contracted in the last quarter. |
| Now that London’s stock market is back in business, City investors can return to fretting about the risks of a global downturn. | Now that London’s stock market is back in business, City investors can return to fretting about the risks of a global downturn. |
| This week’s market turbulence, and the now notorious inversion of the US government bond yield curve, have put traders on edge. | This week’s market turbulence, and the now notorious inversion of the US government bond yield curve, have put traders on edge. |
| Hong Kong’s has now added to the jitters, reporting that its economy shrank by 0.4% in the second quarter of this year. That’s worse than the 0.3% decline first reported. | Hong Kong’s has now added to the jitters, reporting that its economy shrank by 0.4% in the second quarter of this year. That’s worse than the 0.3% decline first reported. |
| Hong Kong thus joins Germany, the UK and Sweden, which also suffered a contraction in April-June, as the world economy slows. | Hong Kong thus joins Germany, the UK and Sweden, which also suffered a contraction in April-June, as the world economy slows. |
| This may also indicate that the pro-democracy protests that gripped the city for months are having a more serious impact on its economy than first thought. With tourism down, and the Hong Kong airport seriously disrupted this week, the region could soon be in recession. | This may also indicate that the pro-democracy protests that gripped the city for months are having a more serious impact on its economy than first thought. With tourism down, and the Hong Kong airport seriously disrupted this week, the region could soon be in recession. |
| Here’s our news story on the gremlins taking control of the London stock market. | Here’s our news story on the gremlins taking control of the London stock market. |
| London Stock Exchange hit by worst outage since 2011 | London Stock Exchange hit by worst outage since 2011 |
| The LSE won’t say exactly what went wrong this morning, apart that the problem centred on its software. | The LSE won’t say exactly what went wrong this morning, apart that the problem centred on its software. |
| Here’s the official statement: | Here’s the official statement: |
| London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and FTSE 250 stocks. | London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and FTSE 250 stocks. |
| Following resolution of the issue regular trading in all securities commenced at 09.40. | Following resolution of the issue regular trading in all securities commenced at 09.40. |
| That issue scuppered the usual pre-open auction (which helps to set prices before trading gets underway at 8am). | That issue scuppered the usual pre-open auction (which helps to set prices before trading gets underway at 8am). |
| AJ Bell investment director Russ Mould says today’s problems have livened up an otherwise dull morning: | AJ Bell investment director Russ Mould says today’s problems have livened up an otherwise dull morning: |
| Investors would have been yearning for a quiet Friday after a week of turmoil for the markets driven by recession fears. | Investors would have been yearning for a quiet Friday after a week of turmoil for the markets driven by recession fears. |
| “And it looked like just such a peaceful interlude was on the cards until technical issues at the London Stock Exchange delayed the start of trading in FTSE 350 stocks, delaying an expected rebound for the index.” | “And it looked like just such a peaceful interlude was on the cards until technical issues at the London Stock Exchange delayed the start of trading in FTSE 350 stocks, delaying an expected rebound for the index.” |
| Today’s stock market glitch hasn’t affected the pound, which has just jumped to its highest level in eight days. | Today’s stock market glitch hasn’t affected the pound, which has just jumped to its highest level in eight days. |
| Sterling has gained 0.5% against the US dollar to $1.2141, as the campaign to prevent a no-deal Brexit in October gathers pace. | Sterling has gained 0.5% against the US dollar to $1.2141, as the campaign to prevent a no-deal Brexit in October gathers pace. |
| Earlier today the leader of the Liberal Democrats, Jo Swinson, insisted that an emergency government could be installed to prevent Britain crashing out of the EU, and that Conservative grandee Ken Clarke and senior Labour MP Harriet Harman – the father and mother of the house – are both willing to lead it. | Earlier today the leader of the Liberal Democrats, Jo Swinson, insisted that an emergency government could be installed to prevent Britain crashing out of the EU, and that Conservative grandee Ken Clarke and senior Labour MP Harriet Harman – the father and mother of the house – are both willing to lead it. |
| Jo Swinson still prefers Clarke or Harman as interim PM despite pressure | Jo Swinson still prefers Clarke or Harman as interim PM despite pressure |
| The London Stock Exchange has just revealed that some buy and sell orders that should have expired this morning are still lurking on its trading platform. | The London Stock Exchange has just revealed that some buy and sell orders that should have expired this morning are still lurking on its trading platform. |
| That may explain why trading was delayed for so long. | That may explain why trading was delayed for so long. |
| The LSE says: | The LSE says: |
| GTD orders expected to expire this morning have remained in the system. | GTD orders expected to expire this morning have remained in the system. |
| These orders cannot be traded against and are still being advertised via Market Data. This has caused crossed order books. This is being investigated and an update will be provided at 10:30. | These orders cannot be traded against and are still being advertised via Market Data. This has caused crossed order books. This is being investigated and an update will be provided at 10:30. |
| What, I hear some readers cry, is a GTD order? | What, I hear some readers cry, is a GTD order? |
| It stands for ‘good until date’ -- an instruction to one’s broker to maintain a buy or sell order until a specific time. Then it would expire, unless it had already been executed. | It stands for ‘good until date’ -- an instruction to one’s broker to maintain a buy or sell order until a specific time. Then it would expire, unless it had already been executed. |
| Failing to cancel a GTD order as instructed would cause problem -- asset managers might find they’ve bought or sold something they didn’t mean to..... | Failing to cancel a GTD order as instructed would cause problem -- asset managers might find they’ve bought or sold something they didn’t mean to..... |
| The London stock market seems to be trading normally now, after being stricken for more than an hour and a half. | The London stock market seems to be trading normally now, after being stricken for more than an hour and a half. |
| Every sector is higher, with telecoms, financial stocks and healthcare leading the way. | Every sector is higher, with telecoms, financial stocks and healthcare leading the way. |
| But even so, investors didn’t need the drama, following the wild swings in asset prices we saw this week. | But even so, investors didn’t need the drama, following the wild swings in asset prices we saw this week. |
| The BBC’s Victoria Fritz points out that nerves were already frazzled by recession fears. | The BBC’s Victoria Fritz points out that nerves were already frazzled by recession fears. |
| FTSE 100 & FTSE 250 resumes trading, 1hr 40 mins after its European peers due to ‘technical difficulties’ at the London Stock Exchange. All moving higher after a turbulent week in markets. | FTSE 100 & FTSE 250 resumes trading, 1hr 40 mins after its European peers due to ‘technical difficulties’ at the London Stock Exchange. All moving higher after a turbulent week in markets. |
| No full explanation from the LSE as yet as to what was behind the glitch. But it hasn’t exactly helped the frayed nerves of investors who have been moving funds to safe haven assets on fears of a global slowdown. | No full explanation from the LSE as yet as to what was behind the glitch. But it hasn’t exactly helped the frayed nerves of investors who have been moving funds to safe haven assets on fears of a global slowdown. |
| This is more like it! | This is more like it! |