Shares down as nervous investors speculate ahead of Greece's audit

FTSE:5,217.63 (-76.42) Mid-250:10,038.67 (-88.46) Small Cap: 2,829.57 (-13.06)

BRITAIN’S TOP shares ended lower after a choppy session yesterday, with investors nervous ahead of an audit of Greece’s finances to determine whether it has done enough to secure a new batch of aid.

Integrated oils helped limit the FTSE 100’s losses, with BG Group, up 3.4 per cent, grabbing the top spot on the leader board, boosted by a Goldman Sachs upgrade to “conviction buy” and a revival of bid speculation.

The UK benchmark closed down 76.42 points, or 1.4 per cent, at 5,217.63, after rallying 4 per cent on Tuesday, its biggest one-day percentage gain in 16 months. The index is down nearly 12 per cent on the year.

Trading throughout the session was turbulent.

The index peaked at 5,314.29, as moves were emphasised by thin volume, at 76 per cent of the 90-day average.

A “troika” audit team from the European Union, European Central Bank and IMF is expected to begin talks in Athens on Thursday on Greece’s plan to deepen budget cuts and raise new taxes.

Germany has suggested that parts of a planned new $148.6 billion rescue for the debt-laden country could be reopened, depending on the audits outcome.

“There’s just been a lot of nervousness out there and people are really unsure where to play the market,” Martin Dobson, head of trading at Westhouse Securities, said.

Angus Campbell, head of sales at Capital Spreads, said. Theres lots of second-guessing, rumours going round, and thats causing a great deal of uncertainty within the market place. Investors are very much still lost in the woods.

Hedge fund manager Man Group was the day’s biggest faller by some margin, down almost 25 per cent in heavy volume – at four and a half times its 90-day average – after reporting a surge in client outflows.

Other financial stocks were out of favour, with UK banks down 2 per cent.

The sector has fallen about 27 per cent this year, partly on concerns that any disorderly Greek debt default would hit European banks hard and lead to a banking crisis.

Cairn Energy was another significant FTSE 100 faller, off 6.5 percent, in solid volume, after the British oil firm said it drilled its third dry hole of the year in its key exploration region off the coast of Greenland. – (Reuters)