Technical glitch delays opening of already down London Stock Exchange

On Friday, London Stock Exchange witnessed its worst suspension in the last eight years, as the trading in FTSE 100 (hold biggest companies) and FTSE 250 holding medium sized stocks) started around 9.40 am instead of its scheduled time of 8 am.

The delay affected the companies including AstraZeneca, BHP Group, BP, HSBC, Shell and Unilever. But as soon as the market opened the FTSE 100 picked up and entered positive territory, going 23 points up or 0.33%  in the late afternoon.

Last time the UK stock market suffered a major delay in trading was in February 2011, when exchange did not begin trading did until lunchtime. Besides, a year ago in June the exchanged faced a similar software issue, due to which the trading opened an hour later than its usual 8 am.

Software issue holding up the market when stocks are anyways plummeting, deflated the investor confidence. On Thursday, London’s FTSE 100 closed 1.1% down at 7,067, it was the lowest it went since February.

Besides stocks, jitters were also felt in the bond market as the investors are moving away from the solid territory of bonds. On Wednesday, the yield on 10-year UK bond went lower than the 2-year bond for the first time in over a decade. This inverted yield curve implies that investors want more returns for short-term government bonds as compared to the long-term ones. It is seen as one of the major signs of emerging recession. The Brexit uncertainty is adding to the country’s economic slow down.

The fear of recession looms not only over Britain but all over the Europe, worst scenario being witnessed in German, economic powerhouse of Europe. On Thursday, German Dax dropped by 0.7% and the French CAC 40 dipped 0.3%, taking European markets to a six-month low. “Investors would have been yearning for a quiet Friday after a week of turmoil for the markets driven by recession fears,” said Russ Mould at investment platform AJ Bell.

Leave a Reply

Your email address will not be published. Required fields are marked *