TURBULENT stock market conditions allowed the London Stock Exchange to push revenues ahead by 7 per cent to £59.4 million in the three months to December 31, the third quarter of its financial year.

But Stock Exchange shares, which have enjoyed a run in recent weeks on bid speculation, retreated 7¾p to 344¾p as the market cooled on the idea.

The speculation has centred around Deutsche Börse, the Frankfurt exchange, which tried to merge with the LSE in late 2000 and which some analysts believe might be considering a hostile bid.

But one London analyst said last night: “It’s becoming increasingly obvious there’s not going to be a bid for them. Hostile cross-border takeovers are difficult; hostile cross-border takeovers of national institutions are very difficult.”

Neither the Frankfurt nor the London exchange has commented on the speculation. But the shares, trading at around £3 a month ago, peaked at 355p last week.

Revenues were helped by higher volumes on SETS, the electronic order book. Volumes rose to an average of 109,000 bargains a day during the third quarter, from a corresponding figure of 79,000.

Trading on SETS was boosted by brokers’ increasing use of it, in part to hedge against various new derivatives. But the volatile markets seen last year generated more trade.

Against this, the market for new share issues was weak, the amount of fresh equity raised by companies in the third quarter halving to £300 million. As City brokers laid off staff, the number of terminals receiving data from the Exchange fell by 2,000 to 98,000.

Clara Furse, the LSE chief executive, said the third-quarter performance was “creditable” in the tough market conditions and she expected a “satisfactory result” for the year.