Greek worries and fall in energy stocks weigh on FTSE.

By Sudip Kar-Gupta.

LONDON (Reuters) - Worries over the political outlook in Greece and a fall in major energy stocks weighed on Britain's top equity index on Monday.

The blue-chip FTSE 100 index, which fell 2.7 percent in 2014 and retreated 0.3 percent on Friday, declined 0.5 percent to 6,519.83 points in early session trading.

Weaker energy stocks, such as BP and Royal Dutch Shell, took the most points off the FTSE, as worries about a surplus of global supplies and lacklustre demand pushed the oil price to new 5-1/2 year lows.

Marks & Spencer also fell 1.6 percent after SocGen downgraded the supermarket retailer to "hold" from "buy".

European stock markets have been pegged back over the last month by uncertainty over Greece.

Greece holds elections on Jan. 25, and the left-wing opposition Syriza party - which wants to cancel austerity measures imposed on the country after an international bailout and a chunk of Greek debt - is narrowly ahead in opinion polls.

German Vice Chancellor Sigmar Gabriel said on Sunday that Germany wanted Greece to stay in the euro zone and there were no contingency plans to the contrary, responding to a media report that Berlin believes the euro currency union could cope without Greece.

Alpari UK analyst James Hughes said concerns remained that Greece could leave the euro zone.

Yet other traders said the prospect of new stimulus from the ECB - such as mass purchases of government bonds in a process known as quantitative easing (QE) - was helping cushion the hit to European stock markets from the Greek situation.

"As far as Greece is concerned, there is still that backdrop of more stimulus from the ECB. No-one wants to be too far out of the market in case the ECB intervenes," said Dafydd Davies, partner at Charles Hanover Investments.

Securequity sales trader Jawaid Afsar also said he would look to buy the FTSE on any dips as "QE can only be good news for Europe".

(Editing by Susan Thomas)
Culled from Yahoo News.