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Hong Kong Stock Market Retracts Offer to Buy London Exchange

TAIPEI, Taiwan — The Hong Kong Stock Exchange will no longer proceed with its nearly $37 billion offer to buy its London competitor, it announced on Tuesday morning, in a setback for the exchange’s long-running effort to build a closer connection to European markets.

The surprise bid was initially presented four weeks ago as a way for the pre-eminent stock markets of Asia and Europe to join forces to provide simpler trading and help bring China, the world’s second-largest economy, more directly into global financial markets. The Hong Kong market said that if the two exchanges combined, they could offer continuous trading for 18 hours a day.

The Hong Kong exchange did not say why it had retracted its offer. But the London Stock Exchange Group had rejected the offer within two days, saying it was “simply not credible” and not even a basis for negotiations.

If the offer by Hong Kong Exchanges and Clearing had gone through, it would have combined markets in two cities facing imminent political challenges. Hong Kong has been roiled by four months of increasingly violent protests over the city’s relationship with the mainland. London has faced a loss of banking jobs to Continental Europe as Britain deals with a possible exit from the European Union at the end of this month.

This is a developing story and will be updated.

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