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Second Outage in a Month Adds to London Exchange’s Recent Woes

(Bloomberg) -- FTSE Russell indexes suffered a 40-minute outage on Friday, the second technical failure to strike London Stock Exchange Group Plc in less than a month, disrupting trades in the UK, Italy and South Africa.

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All indexes went down at 9:10 a.m. UK time before the problem was resolved, a spokesperson for LSEG, which owns the indexes, said by phone. The technical glitch froze trading on a number of benchmark indexes, with a flat line displayed on intraday charts for the duration of the disruption.

Gauges affected include the blue-chip UK FTSE 100 Index, Italy’s FTSE MIB and the South Africa benchmark, known as the JALSH, data provided by Bloomberg showed. There’s no sign that the incident affected individual stocks, which were trading as usual.

An outage earlier in the day on the Refinitiv FX trading platform, also owned by LSEG, disrupted trading in the Indian rupee, according to people familiar with the matter. The currency weakened to a record low on Friday. The “technical incident” affected the platform’s FX Matching service between 6:33 and 7:03 a.m. London time, an LSEG spokesman said.

The disruption, which comes after a similar incident in mid-October, is a further setback for the UK’s main exchange provider that’s facing a shrinking market as a growing number of companies move their listings elsewhere. A lack of initial public offerings, along with a flurry of takeovers by overseas and private equity firms, mean there are more companies leaving the UK market than joining it, according to a recent research report from investment bank Peel Hunt.

“This is a headache the LSEG could do without, given it comes during a year when the London Stock Exchange has struggled to attract IPOs and seen a number of listed firms bought out by private equity firms,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Average daily traded volumes also dropped in the third quarter, year-on-year, part of a trend that’s been underway since the financial crisis.”

In October, trading on hundreds of shares was halted in the final 80 minutes of a session. The interruption affected mostly smaller-cap equities. Stocks on the FTSE 100 Index, FTSE 250 and International Order Book weren’t affected, LSEG said at the time.

LSEG, which is due to hold a capital markets day next week, has been focused on building tech for its clients. Microsoft Corp. agreed late last year to buy a 4% stake in the exchange provider in a $2.8 billion cloud-computing deal.

The parent company of Bloomberg News competes with LSEG to provide financial news, data and information.

--With assistance from Chiara Remondini, Antonio Vanuzzo and Anup Roy.

(Updates to add backgroung throughout.)

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