London close: Stocks higher despite soaring Spanish yields

-Stocks swing between gains and losses on euro crisis-New Democracy wins majority in Greek elections-Spanish yields set euro-era high...againThe Footsie ended the day only slightly higher as soaring bond yields in Spain and uncertainty over the situation in Greece weighed on sentiment.There was a brief sigh of relief at the market open with stocks racing ahead on the news that conservative party New Democracy came out as a clear leader in Greece's elections at the weekend, beating far-left party Syriza. It is expected to form a majority coalition with pro-bailout partner Pasok which should be enough to allow the country to remain inside the Eurozone for now. However, gains were quickly pared with experts saying that very little has changed. Analysts at UBS told clients that the outcome "leaves us as we were, with considerable uncertainty", while Citi continues to put the risk of a Greek exit in the next 12 to 18 months at between 50% and 75%. Economists at Morgan Stanley, on the other hand, were of the following opinion, "to the extent that a government willing to cooperate with Europe emerges, the probability of a near-term Eurozone exit, which we put at 35% over 12-18 months, will diminish - regardless of whether this government can comply with the conditions." Turning to Spain, the yield on a 10-year Spanish Treasury was up 28.6 basis points at 7.16% by the close. The rate hit an all-time high of 7.285% earlier. We are now at levels which some fund managers see as untenable in the medium term. According to reports late on, the two independent consultancy groups assessing the Spanish banking system could reveal that the sector needs up to €150bn in provisions (not new capital) in order to cleanse its balance sheet. That would lead to capital needs possibly even well above the €40-€70bn estimate suggested over the last week. The final report is expected to be released from Thursday onwards, Spanish website El Confidencial reported. The reason for those possibly higher than expected provisions would be the extension to the case of Spain of some of the parameters seen during the Irish crisis. Nevertheless, "that is something which may be far too aggressive," comment analysts at Digital Look. In any case, markets have the last word, as always."Once the external audit of the Spanish banks is concluded at the end of the month, and the banks are recapitalised, we should see the yields come down. However, the Eurozone can only keep plugging the holes for so long," said analyst Craig Erlam from Alpari.Today marked the start of the G20 summit which is being in Los Cabos, Mexico, where leaders will discuss the European debt crisis as a top priority. "Euro area countries agree to take all necessary measures to safeguard region's integrity and stability," according to a draft G20 communique leaked by Reuters.Negative research out today from the likes of Bank of America, Fidelity and Citi on Spain may also have weighed on sentiment. The latter´s chief economist has gone on record as saying he expects both Italy and Spain to require sovereign rescues, whereas it is already too late for Greece in his opinion. Another negative factor weighing on Spanish fixed income markets was news that the country´s bad loan ratio worsened to 8.72% in April from 8.37% in the month before. FTSE 100: Banks dented by Eurozone, broker commentsLeading the downside were the financials with RBS, Lloyds and Barclays among the worst performers. Nomura maintained its 'neutral' view of the UK banking sector this morning, saying that while the initial reaction to last week's new stimulus measures was positive, "we see it more as a trading/short term rally, and a continuation of the volatile price reaction we have seen over the past year." There were also reports over the weekend that Lloyds could be closer to floating a new bank as it struggles to sell off its 632-branch network known as Verde.Hedge fund manager Man Group was higher after announcing that its Finance Director Kevin Hayes has quit. Jonathan Sorrell, currently Man's Head of Strategy and Corporate Finance, is taking over as Finance Director with immediate effect. In other news, power systems group Rolls-Royce was in demand after signing a submarine contract worth over £1bn with the Ministry of Defence. Media giant WPP rose after acquiring a majority stake in Slovakian advertising agencyCommunication Group. FTSE 250: Cable & Wireless takeover on as Orbis concedes Orbis, which owns around a fifth of Cable & Wireless Worldwide stock, said it would not try to block a takeover bid for the firm by Vodafone, boosting shares early on. Despite initially saying the offer of 38p a share was too low, Orbis said it now believed the deal was inevitable. ??Engineering buy-out firm Melrose has confirmed speculation that it is in discussions to buy German group Elster, sending shares lower. Reports said the deal could be worth over $2bn, but the firm is so far keeping the terms of any deal to itself. ??Diamond producer Gem Diamonds dropped after it revealed that production at its Ghaghoo project in Botswana will commence later than originally expected, as 'adverse ground conditions' resulted in the death of two contractors on site. 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