Traders and investors were left scrambling after the London Stock Exchange was hit by a technical glitch for around seven hours.

By 4pm the system was back up and running having been down since around 9am - its longest market stoppage since April 2000.

In early trading, the FTSE 100 Index had surged 199.5 points to 5440.2 - almost 4 per cent - after mortgage giants Fannie Mae and Freddie Mac were bailed out by the US government.

Trading volumes had been heavy following the news from the US, with around 270 million blue-chip shares changing hands in just over an hour before the system was shut down.

The market's resumption came well after the opening of Wall Street, when the Dow Jones Industrial Average rose more than 2 per cent as investors welcomed the removal of uncertainty following the mortgage intervention.

The LSE has not yet revealed the cause of the problems.

Another major electronic exchange, the Intercontinental Exchange (Ice), also shut down its operations as a result of "technical issues".

Ice, which is based in the US but has major operations in London, offers futures and other specialist financial contracts for commodities including crude oil, natural gas and electricity.

A recorded message said: "The Ice trading platform is experiencing technical issues. As a result, all futures and Over-The-Counter markets have been closed. All unexecuted active orders in closed markets have been held."

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