The IT crisis is wreaking havoc on the markets: CrowdStrike falls by up to 20%

Stock markets were firmly in the red after a global IT outage caused chaos in financial centres around the world.

In London, the FTSE 100 fell 43.61 points to 8,161.28 in early trading and the price remained frozen for hours, causing havoc among traders buying and selling blue-chip stocks.

The index finally closed down 0.6 percent, or 49.17 points, at 8,155.72.

The chaos was caused by an update sent by CrowdStrike, a Texas-based cybersecurity firm, to businesses that use its software on Microsoft Windows computers to protect against hackers and online intruders.

A London Stock Exchange Group spokesperson said: “We have experienced an impact on our live platforms, preventing clients from accessing and receiving data. This disruption is affecting FTSE Russell’s live indices. Our dedicated teams are actively investigating the matter with a view to resolving it as quickly as possible.”

European investors were also nervous: France’s CAC 40 lost 0.7 percent and Germany’s DAX fell 1 percent.

In the United States, there was a sea of ​​red numbers: the S&P 500 fell 0.8 percent, the Nasdaq Composite dropped 0.9 percent and the Dow Jones Industrial Average lost just over 1 percent.

Microsoft and CrowdStrike were among the biggest fallers, with the latter plunging more than 20 percent in early trading as the cybersecurity firm suffered from the software flaw. Other tech stocks also fell.

The problems were so severe that traders and bankers, including staff at JP Morgan and Marex, went home early because they were unable to log into their internal systems and many found themselves locked out by a blue error screen.

Hedge funds, which rely on banks to execute and clear trades, also suffered disruption. Adam Pollock, director at Oberon Investments, said: “There has been chaos since the market opened as many have been unable to log on to computer systems. Most have simply gone home and started their weekend early.”

The London Stock Exchange also said its RNS service – the main means UK companies use to make regulatory news announcements – experienced problems that prevented news from being published on its website.

The RNS processes more than 350,000 advertisements a year, and 75 percent of all price-sensitive news originates from the service.

In London, airline shares were hit after thousands of planes were grounded and holidaymakers were stranded at airports. Easyjet fell 2.1 percent, or 9.7 pence, to 459 pence, and British Airways owner International Consolidated Airlines lost 2.2 percent, or 3.85 pence, to 170 pence.

British Airways warned passengers of potential problems, saying it had experienced “issues with our operating systems.” It is a particularly sensitive time for airlines, at what is expected to be the busiest time of the year. In Germany, Lufthansa fell 1.8% and Air France 2% in Paris.

Insurers Beazley and Hiscox, among them, suffered some of the biggest falls in their share prices, indicating that operators are considering large payouts under business interruption cover. Beazley fell 3.3% and Hiscox 1.8%.

Grzegorz Drozdz, an analyst at currency exchange firm Conotoxia, said: ‘Determining the responsible party and the possibility of seeking compensation could take months.

“Even if a guilty party is identified, they may not be able to cover such large liabilities. A significant portion of the costs may be covered by insurers or reinsurance companies.”

Investors instead turned to safe havens, snapping up well-known brands such as Rolls-Royce and Sainsbury’s, which rose 2.7 percent and 0.7 percent respectively.

Dan Coatsworth, investment analyst at AJ Bell, said: “The fact that the world is coming to a standstill due to a global technology meltdown shows the dark side of technology and that relying on computers does not always make life easier.”