Market Report: City sceptical over Greek banks' surge

Best punt of the day? Greek banks, which soared on average 19 per cent at one point yesterday on hopes that the pro-bailout parties will be swept to power at this weekend's election. Not quite the view that prevailed in London, where leading shares were broadly down and banks remained out of favour.

Aviva Investors, the fund manager, summed up the more cautious opinion. It rates the likelihood of what it calls a "muddling through" with Greece retaining the euro at 40 per cent, an orderly exit from the euro at 40 per cent and the worst case disorderly exit at 20 per cent. For the former they reckon European equities could gain 5 per cent to 10 per cent for the latter another 30 per cent drop is in store.

The FTSE 100 fell 16.76 points to 5,467.05 with mutterings of further quantitative easing in the United States doing little to raise sentiment.

Man Group topped the losers with a 4 per cent fall to hit a new 12-year low of 69.15p. Bad for investors means even worse for fund managers.

Some 15 years of corporate unrest at London brewer Young & Co came to an end as former active investor Guinness Peat placed its 15.5 per cent stake. GP had campaigned for years to end the Young family's domination through the use of split voting shares. To no avail. So GP, which is winding down all its investments sold 4.47 million A shares at 550p and 6.54 million non-voters at 450p. The A shares dipped 10p to 605p.

Could the shareholder spring/summer really derail the biggest mining merger in living memory? There is still a month to go until shareholders in Glencore and Xstrata get to vote on the two firms £50bn plus merger. But already the rumbles of discontent are louder than a conveyor belt of metal ore loading a massive truck.

Xstrata shares were on the slide for the second day running. Among the top losers on the FTSE 100, they were down another 2.2 per cent or 20.4p at 899.6p. That followed the previous day's 5.2 per cent fall. The immediate trigger was the 60 per cent-plus vote against Sir Martin Sorrell's £13m pay package at WPP's annual meeting in Dublin on Tuesday.

If shareholders are prepared to give Sir Martin a bloody nose, why should they hold back against either Xstrata's Mick Davis or Glencore's Ivan Glasenberg?

The major bone of contention is that £217m of "retention payments" will be handed to several Xstrata executives if the deal goes through. Major investors are becoming increasingly vocal about the fact that they cannot see how these payments are justified. Since there is no separate vote on this issue at the shareholders' meeting, they may have to register their disapproval by voting the merger down lock, stock and smoking barrel. Glencore was also on the slide, down 13.3p at 341.7p.

Fears over a slowing in the rate of growth in sales at fancy handbags maker Mulberry (down 22 per cent) had a knock-on effect at its FTSE 100 rival Burberry whose shares shed 43p to 1,298p.

In a football City, last night's scores in the Euros were overshadowed by the price BT and Sky have forked out for the Premier League. They came fourth and fifth on the loser board with BSkyB off 24.5p at 671p and BT down 7.4p at 201.7p.

A far from thinly disguised profits warning from IT services group Computacenter received the full drubbing it deserved. A statement, clearly penned by the Obfuscation School of Public Relations, highlighted a 15 per cent-plus increase in its services revenues and significant growth prospects ahead. It was not until the penultimate paragraph that it was revealed gearing up for all this growth will hit profits by £7m this year. Traders hit the red button and the shares tanked 43.7p to 313p – a 21-month low.

How appropriate that, on the 30th anniversary of the end of the Falklands War, the company that runs much of the islands' services should come to the stock market for more cash. Falkland Islands Holdings is raising £10m through a placing with Savile Row-based Blackfish Capital (£8m) and an open offer (£2m) at 320p a share. The extra cash is going to be spent on expanding FIH's facilitie s on the islands including warehousing offices and accommodation to cater for the hundreds of Rockhopper Oil's roughnecks it expects to descend on the Falklands to exploit its recently discovered oil reserves.

The shares slipped 10.16p to 345p but remained comfortably above the subscription price.