London has explored the idea of a 24-hour stock exchange (or significantly extended trading hours), primarily driven by the following key factors:

1. **Competition with Asian Markets:** This is the **primary driver**. London’s traditional trading hours (8:00 AM – 4:30 PM GMT) overlap poorly with the core trading hours of major Asian financial centers like Tokyo, Hong Kong, and Singapore. When London closes, Asia is just waking up or entering its afternoon session. A 24-hour exchange would allow Asian investors to trade London-listed assets (like major UK stocks, ETFs, and global depositary receipts) during *their* normal business hours, making London more attractive and competitive for Asian capital.

2. **Attracting Global Capital Post-Brexit:** Following Brexit, London faces increased competition from EU exchanges (like Amsterdam and Frankfurt) and needs to reinforce its position as a truly global financial hub. Offering extended or continuous trading makes it more accessible and relevant to investors across all time zones, helping it retain and attract international listings and liquidity that might otherwise go elsewhere.

3. **Catering to International Investors:** Global asset managers and hedge funds operate around the clock. Extended hours give them greater flexibility to manage their portfolios, react to news and events happening outside London hours (e.g., earnings releases in the US or Asia, geopolitical events), and execute trades when it suits their global strategies, rather than being constrained by the local exchange schedule.

4. **Reducing Overnight Risk & Price Gaps:** Significant news often breaks when exchanges are closed. This can lead to large gaps between the closing price one day and the opening price the next, creating volatility and uncertainty. Continuous trading allows investors to react immediately, potentially smoothing out these transitions and reducing opening volatility.

5. **Technological Feasibility:** Advances in electronic trading and automation make operating outside traditional hours far more feasible than in the past. The infrastructure largely exists to support near-continuous trading.

**Important Context & Current Status:**

* **It’s a Proposal, Not (Yet) Reality:** The London Stock Exchange Group (LSEG) actively consulted on extending trading hours (specifically opening earlier to overlap with Asia) in **2019**. While there was significant interest, especially from large international banks and asset managers, it also faced pushback.
* **Significant Challenges Remain:**
* **Liquidity Concerns:** The biggest fear is that extended overnight sessions would have very low trading volumes and liquidity, making markets thin, volatile, and potentially easier to manipulate. Would enough participants trade actively during Asian hours to make it viable?
* **Operational Burden:** Brokers, market makers, and exchange staff would face increased operational complexity, staffing requirements, and costs to support longer hours. This raises concerns about work-life balance and cost-effectiveness.
* **Fragmentation:** If only some participants are active overnight, it could fragment liquidity between the “day” session and the “night” session.
* **Competitive Response:** Would other major exchanges (like NYSE or EU exchanges) follow suit, potentially negating London’s first-mover advantage?
* **No Implementation Yet:** Despite the consultation, the LSEG **has not implemented** extended trading hours as of late 2023/early 2024. The challenges, particularly around ensuring sufficient overnight liquidity and managing costs, appear to have outweighed the potential benefits for the time being. The focus may have shifted to other competitive initiatives.

**In Summary:**

London considered a 24-hour/near-24-hour exchange primarily to **capture Asian trading flows, boost its global competitiveness post-Brexit, and cater to international investors demanding greater flexibility.** While technologically possible and driven by strong competitive pressures, the proposal stalled due to concerns about **low overnight liquidity, increased operational costs and complexity, and potential market fragmentation.** While the *idea* remains relevant in the context of global competition, it is not an active plan for immediate implementation.