THE MAJOR talking point this week has been the London Stock Exchange itself, writes Jon Hitchin, of Hargreave Hale & Co

After 227 years of independence, the London Stock Exchange (LSE) ended its mutual-ownership status in May and agreed to merge with the Deutsche Boerse to create an exchange called iX, and issued stock to member brokers.

However, on Tuesday, OM Group, owner of the Stockholm Stock Exchange, launched a £840m hostile bid for the LSE, fuelling a new batch of speculation as to what would happen to the LSE.

There are several likely options. At the very least the terms of the merger between London and Frankfurt are likely to be modified.

The Deutsche Boerse has indicated that it would be interested in inviting OM to join the London-Frankfurt alliance, though OM has rejected the idea on the basis that they do not agree with the basic model of iX.

The Germans have also indicated that they would consider replacing the LSE agreement with a take-over offer if Milan and Madrid were prepared to join the bid.

There is also speculation that Nasdaq, the highly successful US technology index, may make a bid for the LSE, though Nasdaq has refused to comment on the rumours. At the very least Nasdaq is planning to take a stake in iX -- if that deal succeeds.

Finally Euronext, comprising the bourses of Paris, Brussels and Amsterdam has also expressed an interest in forming an alliance with the LSE.

The future is uncertain to say the least. At the end of the day though the target for most UK brokers is to reduce costs as much as possible.

The FTSE 250 hit a record high this week as second-line technology stocks saw some massive gains.

Excellent interim results from CMG and full year results from Morse Holdings sparked some heavy buying in the sector, which has suffered since the dot-com sell-off in the second quarter.

Blue chip technology stocks also benefited, with companies such as Marconi, Sage and Logica experiencing big rises. Even the telecoms stocks, which have had a dreadful summer, seem to be picking up, helped this week by some good results from Redstone Telecom.