London open: Stocks sink on Greek exit speculation

- Political uncertainty in Greece, Germany weighs on sentiment- Officials consider Greek euro exit- Banks, miners drag on the FTSE 100European equity markets were a sea of red on Monday morning as continuing concerns over the political situation in Greece fuelled a sell-off early on. The Footsie dropped well over one per cent in the opening hour, with banking and mining stocks weighing heavily on the benchmark index.Greece's radical left-wing party Syriza has rejected an invitation from President Karolos Papoulias to meet for negotiations on the formation of a coalition. Papoulias attempted to organise talks with the country's three-largest parties, New Democracy, Syriza and Pasok, along with the smaller Democratic Left that had been involved in attempts to come to an agreement. If an agreement cannot be reached, the Greeks will return to the polls for new elections. "For now, the absence of a formal government means that Greece will find it very tough to make any progress on the reforms it is required to deliver under its Troika assistance programme. Greece is likely to find itself with a pretty poor school report when its next review comes up, throwing into question the release of future aid tranches and Greece's ability to fund itself to keep even its own lights on," said analysts at brokerage Investec.Some European officials have started to speculate about a Greek exit, with the Financial Times quoting central bank governors from Belgium and Ireland. "I guess an amicable divorce - if that was ever needed - would be possible, but I would still regret it," Belgium's Luc Coene. Ireland's Patrick Honohan said: "Technically, it [a Greek exit] can be managed. ... It is not necessarily fatal, but it is not attractive."Meanwhile, the President of the Bundesbank, Jens Weidmann, said at the weekend that if the country were to leave the exit the single currency, "the consequences for Greece would be more serious than for the rest of the Eurozone."In other news, German Chancellor Angela Merkel's CDU party received yet another blow as the opposing social democrats strengthened their position in the country's most populous state. Voters in North Rhine-Westphalia chose the centre-left SPD candidate Hannelore Kraft over conservative CDU candidate Norbert Roettgen, giving the social democrats a firm victory ahead of next year's nationwide elections. FTSE 100: Banks, miners drag on FootsieBarclays, RBS and Lloyds were among the worst performers on concerns over the global economic outlook given the political uncertainty in the Eurozone. HSBC was also out of favour after announcing that the sale of its operations in Colombia, Peru, Uruguay and Paraguay for $400m in cash.Falling metals prices were providing downward pressure on the share prices of the blue-chip miners, with Anglo American, ENRC, Vedanta, Kazakhmys, Xstrata and BHP Billiton all lower. Polymetal International fell after announcing the sale of its Veduga gold deposit in the Krasnoyarsk region of Russia for $20m.Outsourcing specialist Serco was lower after warning that its first-half performance will reflect the challenging environment in the US. Nevertheless, the firm said that it is on track to meet its full-year expectations.FTSE 250: Lonmin, Essar fall after updatesLonmin, the world's third-largest platinum producer, dropped after saying production in the first three months of 2012 was little changed from a year earlier, despite losing 170,000 tonnes of production because of safety stoppages.Essar Energy was out of favour after announcing that its 87.09%-owned Indian oil subsidiary, Essar Oil, saw a sharp drop in earnings in the year to March 31st due to the reversal of a sales tax benefits and a planned plant shutdown.The takeover of financial software firm Misys by Vista Equity Partners came a step closer on Monday after it passed a legal hurdle in Portugal, helping shares higher early on.Exploration firm Afren rose after saying it had found significant oil reserves at its Ebok North Fault Block well, offshore Nigeria.Bingo, casino and online gaming company Rank Group jumped after making a conditional agreement to acquire Gala Casinos from Gala Coral Group, making it the largest casino operator in the UK.FTSE 100 - RisersBritish Sky Broadcasting Group (BSY) 696.00p +0.36%International Power (IPR) 419.20p +0.05%FTSE 100 - FallersMan Group (EMG) 83.75p -4.72%Royal Bank of Scotland Group (RBS) 22.05p -3.96%Lloyds Banking Group (LLOY) 30.04p -3.38%Barclays (BARC) 196.00p -3.35%Eurasian Natural Resources Corp. (ENRC) 501.00p -3.00%Anglo American (AAL) 2,125.00p -2.83%Vedanta Resources (VED) 1,059.00p -2.75%Kazakhmys (KAZ) 743.00p -2.75%Xstrata (XTA) 1,024.50p -2.61%Aviva (AV.) 294.10p -2.49%FTSE 250 - RisersInvensys (ISYS) 212.30p +4.84%Rank Group (RNK) 119.40p +2.31%Afren (AFR) 124.30p +2.30%Stobart Group Ltd. (STOB) 122.40p +0.66%Misys (MSY) 349.00p +0.58%Berendsen (BRSN) 485.20p +0.48%Supergroup (SGP) 332.00p +0.42%BH Macro Ltd. EUR Shares (BHME) € 19.75 +0.36%PayPoint (PAY) 640.00p +0.31%Phoenix Group Holdings (DI) (PHNX) 490.40p +0.22%FTSE 250 - FallersOphir Energy (OPHR) 514.00p -4.10%Dixons Retail (DXNS) 16.35p -3.77%Lonmin (LMI) 867.00p -3.72%Essar Energy (ESSR) 127.30p -3.49%Lamprell (LAM) 301.40p -3.43%Ferrexpo (FXPO) 244.60p -3.24%Centamin (DI) (CEY) 63.45p -3.13%Elementis (ELM) 195.20p -2.98%Ruspetro (RPO) 163.20p -2.86%Imagination Technologies Group (IMG) 599.00p -2.84%BC