London shares chaos

Exchange boss Gavin Casey: Disappointment

There was chaos in the City on Wednesday as unprecedented technical problems halted trading on one of London Stock Exchange's busiest days of the year.

Trading in UK stocks did not begin until 1545 (1445 GMT), causing havoc on the last day of the financial year.

A very considerable disappointment which we regret greatly

Gavin Casey

The timing could not have been worse.

Big institutions and small investors were thwarted from the buying and selling of shares to minimise their liability to capital gains tax on the profits.

It also followed on from the dramatic swings of 15% seen on the American markets on Tuesday night.

Such was the impact of the fault that UK government ministers even discussed delaying the end of the financial year to enable the completion of the vast amount of business which was due to take place.

But the Treasury said that in the end they had decided against it.

'Very technical'

City watchdog, the Financial Services Authority, announced an investigation into the collapse which left millions of investors unable to trade.

In a statement it said: "The FSA sees the failure of major trading systems to open as a serious matter that requires a prompt and thorough response."

It was a late end in the City

It said it would work with the London Stock Exchange to examine what changes and back-up arrangements needed to be made to avoid a repeat of the debacle.

Stock exchange chief Gavin Casey told the BBC that the problems should not described as "a fiasco".

Instead it was a "very considerable disappointment which we regret greatly".

That was not how traders and investors had described it as they waited eight hours to start trading.

Once the fault was finally fixed the FTSE 100 index of leading shares fell some 120 points to 6,307 - its lowest point for more than two months.

But with London trading extended to 2000 (1900 GMT) for the first time in living memory, the FTSE 100 recovered to end 47.7 points lower at 6,379.3.

Although that figure was calculated at 1830, stockbrokers were able to continue buying and selling shares until the later time to catch up with the vast backlog of trades.

London Stock Exchange confirmed it had a fault in its electronic feed that sends the prices to dealers, but it has given no further explanation.

A spokesman said the problems were "very technical" and involved corrupt data.

The latest problems came only two days after the FTSE 100 index was unavailable for four hours on Monday.

Elsewhere in Europe, stock markets suffered some steep falls. Trading in Frankfurt and Paris was volatile, but on both markets the key indices were down by more than 2.5%.

American stock markets appeared calmer after the excitement of Tuesday, with the Dow Jones industrial average down just over 1% at the close and the technology biased Nasdaq index up more than 2%.