(Updates to add information on competing exchanges in paragraphs five and six, combined exchange savings and NYSE Euronext profit in seventh and eighth paragraphs.)
June 20 (Bloomberg) -- The open of equities trading was delayed for an hour on bourses operated by NYSE Euronext in Paris, Amsterdam, Brussels, Luxembourg and Lisbon because of an unspecified computer malfunction, the exchange operator said.
Euronext fixed the breakdown and trading started at 10 a.m. Paris time. The CAC 40 Index fell 0.6 percent as European Union finance ministers failed to agree on a payment to help Greece avoid a default. The Stoxx Europe 600 Index lost 0.5 percent to 265.76 at the 5:30 p.m. close in Paris.
Trading has been interrupted repeatedly by systems issues this year in Europe, where stock transactions are divided among regulated exchanges and alternative platforms operated by companies such as Chi-X Europe Ltd. London Stock Exchange Group Plc experienced a four-hour halt on Feb. 25 after bringing a new network online 11 days earlier.
“It’s not the first time, but we have to deal with it,” said Yves Marcais, a sales trader at Global Equities in Paris. “It would have been worse if it happened in the middle of the trading session. At least the market wasn’t open and we knew about the delay ahead of time.”
Competing exchanges such as Bats Global Markets Inc. have said glitches show that traditional operators such as NYSE Euronext and LSE, which manage the bulk of equities trading in Europe, aren’t a guarantee of functioning markets by themselves. Today’s trading halt affected bonds, indexes and exchange-traded funds across the five national markets operated by NYSE Euronext, the exchange said.
Alternative exchanges still rely on the main bourses to quote prices. Chi-X Europe said that the NYSE Euronext outage disrupted its trading this morning. Chi-X Europe in November 2009 called for exchanges to halt trading when they encounter technical problems rather than setting an auction phase, which hampers investors from finding a reference price at another venue.
NYSE Euronext cited improving computer systems as a goal of its combination with Deutsche Boerse AG, which was disclosed in February. The companies announced the $9.5 billion deal one day after LSE agreed to buy the operator of Toronto’s main exchange, TMX Group Inc.
Deutsche Boerse needs 75 percent of shareholders to approve its purchase of NYSE Euronext by July 13. The takeover would create the world’s largest exchange company.
The combined exchange should save more than 51 million euros ($73 million) by having common trading and clearing infrastructure, merging networks and “eliminating overlapping IT functions,” they said June 1 to shareholders in Eschborn, Germany for Deutsche Boerse’s annual investor day.
NYSE Euronext in April reported first-quarter profit that beat analysts’ estimates, boosted by higher revenue from European derivatives trading.
NYSE Euronext was formed when the operator of the New York Stock Exchange bought Europe’s second-largest exchange in 2007. It owns exchanges in Amsterdam, Lisbon, Paris and Brussels, as well as London-based Liffe, Europe’s second-largest derivatives market. The company also runs three U.S. stock exchanges: NYSE Arca, NYSE Amex and the New York Stock Exchange, two options platforms and the NYSE Liffe U.S. futures exchange.
“The technical issue is resolved,” said Caroline Tourrier, a spokeswoman for Euronext in Paris. “Now we’re working to identify the nature of the problem.”
--With assistance from Adam Haigh and Alexis Xydias in London and David Whitehouse in Paris. Editors: Chris Nagi, Will Hadfield
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