Times Online – Shares in the London Stock Exchange dropped nearly 10 per cent or 50½p to a four-year low of 463½p amid fears that its trading update tomorrow will show another dramatic slump in the value of equities traded as struggling hedge funds withdraw cash.

Dame Clara Furse, the outgoing chief executive, has seen a 77 per cent fall in the share price of Europe’s biggest stock market from its £19.77 peak a year ago as it has been bedevilled by falling equity volumes and mounting competition from electronic platforms such as Chi-X and Bats. Direct Edge in the US, which has a deal with London’s Plus Markets, yesterday announced that it would convert to an exchange in the last quarter of this year.

Credit Suisse cut its target price to 495p and slashed earnings forecasts, saying the value of equities traded in London had fallen by about 30 per cent in the last three months of 2008 against a year ago and it expected these falls to continue.

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