NEW YORK (AP) – First the euro, now the stock exchanges.

As Europe continues the consolidation of its political and economic might, it now appears that the continent’s 30 to 40 disparate exchanges and markets are showing signs of similar integration.

The London Stock Exchange PLC, England’s venerable financial institution dating back to 1698, continues to hold merger discussions with Deutsche Boerse SA, Germany’s major market, and Euronext NV, owner of the Paris and Amsterdam exchanges. The London exchange on Thursday rejected a Deutsche Boerse offer, saying it undervalued the exchange.

A deal with one or the other is considered likely, however, and has prompted the major U.S. markets – the New York Stock Exchange and the Nasdaq Stock Market – to look even more seriously at European competition.

“This movement in Europe affects the competitive relationship between the New York and European stock exchanges, and might induce some European investors who formerly might have traded in New York to return to Europe,” said Richard Levich, professor of finance and international business at New York University’s Stern School of Business.

Currently, the fractured nature of European equity markets – which have different national regulations and more expensive transaction costs – make the U.S. markets more compelling for international companies seeking to publicly trade their stock beyond their home markets. It also makes trading stock far cheaper in the U.S. for institutional investors.

But the wave of economic reforms in Europe, with Britain leading the way, combined with mergers like the one centered on the London Stock Exchange, is making Europe a more attractive place to list and trade stocks.

“Because of the high efficiency of our capital markets, we’re able to produce a stronger economy than they can. Europe just hasn’t had that,” said Edward Knight, executive vice president and general counsel at the Nasdaq Stock Market. “With this consolidation, they’re moving in that direction.”

Indeed, the consolidation that brought about the euro has turned the unified European currency into an up-and-coming powerhouse. The euro has been at or near all-time highs against the dollar for the past month, and the hub of currency trading has increasingly been in London – though not a member of the euro consortium – rather than its traditional home in New York.

Analysts said the American exchanges and markets own a much higher market share of trading in European securities than European markets do in American stocks. However, while there’s little short-term concern that European markets will steal more market share in U.S. stocks, the American exchanges want to keep their share of international trading intact.

That led to a flurry of reports this past week that the NYSE would open up to two hours earlier than the current 9:30 a.m. opening in order to compete with the London Stock Exchange, which is five hours ahead of New York.

On Friday, NYSE Chief Executive Officer John Thain, in Switzerland for the World Economic Forum, told cable news channel CNBC that the exchange was indeed considering an earlier opening time. “I’d say 8:30 is probably a good guess if I had to pick a time,” Thain said. He added that the privately held NYSE would not put in a bid for the publicly traded London exchange.

More important than trading volumes, however, is the competition to list international stocks. The NYSE and Nasdaq both take great pride in their international listed stocks, with an influx of Asia-based companies in recent years giving the U.S. markets a large boost over their European counterparts.

But as Europe consolidates, integrates and begins operating larger exchanges – ones with common rules and a depth and breadth of listed equities – the NYSE and Nasdaq could begin to see companies in emerging markets heading to Europe instead should European markets become as efficient as those in the United States

“We have a global competition occurring right now in the sense that the major stock markets – London and Nasdaq and New York – compete for listings on a global basis,” Knight said. “As efficient technology spreads, the competition for listings intensifies. The market with the best technology has an advantage in gaining listings. We think that’s Nasdaq.”

What is the impact on the average U.S. investor? At the moment, there isn’t much of one. However, common regulations and systems in Europe will eventually open the doors for U.S. investors to more easily trade in European stocks, on European markets. For active traders interested in short-term gains, admittedly a small part of the overall investing market, it provides more equities in which to invest and more chances for picking a winner.

“I also think that costs will come down” somewhat, Levich said. “If you have an international fund or an index fund that has European securities, you’ll see some lower fees.”

Longer-term, however, U.S. investors could see fewer new companies from overseas listing on the NYSE or Nasdaq, making it more difficult for Americans to get in on hot international stocks.

“The United States has advantages that it will take Europe time to overcome, but they have done it in other areas,” Knight said. “We will have to continue to innovate with more technology and provide as efficient and as fair a market as anyone in the world if we’re going to maintain our supremacy.”

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