FTSE up but technical glitch halts trading

The London Stock Exchange ground to a halt today as its trading system was hit by a embarrassing technical glitch.

The suspension came after some LSE clients experienced difficulty accessing market data, leaving traders virtually blind.

Just before the 9.07am suspension the FTSE 100 Index had surged 199.5 points to 5440.2 – almost 4% – with trading volumes high in the wake of the US government’s bail-out of mortgage giants Fannie Mae and Freddie Mac.

Rival trading platforms such as Chi-X were quick to seize on the LSE’s difficulties. Meanwhile rising US futures in anticipation of a strong start on Wall Street is expected to see the Footsie make further gains when the issues are resolved.

Before trading halted, Sunday’s rescue – effectively a nationalisation - spurred hopes of a recovery for the slumping US housing market and an easing of the credit crunch.

The Footsie followed Asian markets to strong gains in the first hour after its worst week in more than six years.

Halifax Bank of Scotland – the leading Footsie riser – was the strongest performer of four banks showing gains of 10% or more.

HBOS gained 35.75p to 311.25p – or 13%, followed by Royal Bank of Scotland and Barclays, up 26.5p to 246.25p and 37.5p to 354.75p respectively.

Lloyds TSB added 28.25p to 307.25p, while in the second tier, beleaguered Bradford & Bingley added 3.75p to 43.25p, or 12%.

Other sectors exposed to the US housing market also surged forward. Heating and plumbing firm Wolseley added 53.5p to 491.5p in the top flight, and FTSE 250 housebuilder Taylor Wimpey improved 6.25p to 61.75p.

Only three Footsie stocks were in negative territory, two of which were drugs giants AstraZeneca and GlaxoSmithKline.

The duo fell 19p to 2586p and 24.5p to 1245.5p respectively after Merrill Lynch said its favoured picks were elsewhere in the sector.