LONDON (ShareCast) – – FTSE 100 within touching distance of 14-year high
– Banks fall after Deutsche Bank (Xetra: DBK.DE – news) ‘s Q4 loss
– Chinese growth slowed down in Q4
– UK outlook improves
– HSBC highlights potential risks from too-low inflation readings

techMARK 2,853.67 +0.09%
FTSE 100 6,836.73 +0.11%
FTSE 250 16,227.11 +0.25%

It was a quiet session for markets in the UK and across Europe on Monday with volumes on the thin side with Wall Street closed for Martin Luther King Jr. Day.

“European indices are trading little changed after a lifeless start to the week with all headline equity gauges trading within a tight range,” said Max Cohen, Financial Sales Trader at Spreadex.

Nevertheless, the FTSE 100 still managed to eke out small gains to finish up 7.43 points at 6,836.73. The index is now within touching distance of last year’s closing high of 6,840.27 reached in May 2013 and its all-time high of 6,930 hit in December 1999.

Asian markets were lower overnight after data showed that Chinese GDP expanded at a year-on-year rate of 7.7% in the fourth quarter of 2013, slightly ahead of the 7.6% growth expected but down from 7.8% the previous quarter. That means that GDP growth levelled out to 7.7% during 2013 as a whole, the same as 2012, though economists broadly predict a further slowdown next year.

These concerns were countered slightly by an improving outlook closer to home, with UK business optimism improving in the fourth quarter of 2013, according to the quarterly CBI/PwC financial services survey. Meanwhile, reports that the International Monetary Fund is set to upgrade UK growth forecasts also boosted sentiment slightly. It is expected to lift its UK GDP growth projection in 2014 from 1.9% to 2.4%.

On a more sobering note, and in reference to inflation at the global level, the Financial Times cited top-ranked HSBC economist Stephen King as having said: “We’re not forecasting a descent into outright deflation. Instead, we’re highlighting the risk that inflation remains too low or, worse, that it continues to sink over the next two years.”

Banks under pressure

Negative read-across from a surprise fourth-quarter loss at Deutsche Bank weighed on the banking sector across Europe today, with UK banks being no exception. Barclays (LSE: BARC.L – news) , Lloyds, Standard Chartered (HKSE: 2888.HK – news) and HSBC all finished in the red.

RBS (LSE: RBS.L – news) was also hit after analysts at JPMorgan Cazenove downgraded the stock to ‘underweight’.

Leading the upside on the blue-chip index were precious metal miners Fresnillo (Other OTC: FNLPF – news) and Randgold which were both rising strongly with FTSE 250 peer Polymetal following suit.

Oil and gas engineer Weir wasn’t far behind, rising strongly after upbeat comments from analysts at Redburn, which said that “any sign of earnings stability will be met by a re-rating”. Recent M&A activity in the sector and positive read-across from US peer Baker Hughes (Stuttgart: BHU.SG – news) were also said to be behind the rise today. The US outfit is due to publish its latest quarterly results tomorrow.

Similarly,Diageo (LSE: DGE.L – news) and SABMiller (LSE: SAB.L – news) were on the up as M&A activity continues to pick up in the global drinks industry. Just a few days after whisky maker Beam (NYSE: BEAM – news) was bought for $ 16bn by Suntory, it was announced that AB InBev is buying back South Korean brewer Oriental Brewery for $ 5.8bn.

Shares in Hargreaves Lansdown (LSE: HL.L – news) benefited from an upgrade by Credit Suisse (NYSE: CS – news) , which moved its rating on the financial services stock from ‘underperform’ to ‘neutral’ and significantly upped its target price from 790p to 1,470p.

The same bank, however, downgraded its rating for luxury brand Burberry from ‘outperform’ to ‘neutral’, pushing the stock lower by the close.

FTSE 100 – Risers
Fresnillo (Berlin: FNL.BE – news) (FRES) 776.50p +6.08%
Randgold Resources Ltd. (RRS) 4,185.00p +5.82%
Weir Group (Frankfurt: 42W.F – news) (WEIR) 2,227.00p +4.21%
Hargreaves Lansdown (HL.) 1,509.00p +3.85%
Pearson (Dusseldorf: PES.DU – news) (PSON) 1,306.00p +2.03%
Next (Dusseldorf: NXG.DU – news) (NXT) 6,255.00p +1.79%
British Sky Broadcasting Group (BSY) 854.00p +1.67%
Associated British Foods (LSE: ABF.L – news) (ABF) 2,692.00p +1.66%
British American Tobacco (LSE: BATS.L – news) (BATS) 3,121.00p +1.50%
SABMiller (Berlin: BRW1.BE – news) (SAB) 3,094.00p +1.41%

FTSE 100 – Fallers
Barclays (Berlin: BCY.BE – news) (BARC) 282.80p -2.01%
Prudential (Frankfurt: PRU.F – news) (PRU) 1,345.00p -1.39%
Rio Tinto (Xetra: 855018 – news) (RIO) 3,336.00p -1.39%
Royal Bank of Scotland Group (RBS) 359.00p -1.29%
Mondi (Frankfurt: KYC.F – news) (MNDI) 1,001.00p -1.09%
BT Group (LSE: BT-A.L – news) (BT.A) 379.50p -1.02%
Burberry Group (LSE: BRBY.L – news) (BRBY) 1,500.00p -0.99%
CRH (CRH (Irish: CRG.IR – news) ) 1,637.00p -0.97%
Shire Plc (LSE: SHP.L – news) (SHP) 2,993.00p -0.86%
Aberdeen Asset Management (Other OTC: ABDNF – news) (ADN) 435.40p -0.82%

FTSE 250 – Risers
NMC Health (LSE: NMC.L – news) (NMC) 497.90p +6.37%
Imagination Technologies Group (IMG) 208.90p +6.09%
Hunting (HTG) 798.00p +5.77%
Polymetal International (POLY) 570.00p +5.75%
F&C Asset Management (Other OTC: FCAFF – news) (FCAM) 92.00p +4.90%
JD Sports Fashion (LSE: JD.L – news) (JD.) 1,625.00p +3.57% Digital Entertainment (BPTY) 120.10p +3.18%
Carphone Warehouse Group (CPW) 279.80p +3.17%
Oxford Instruments (LSE: OXIG.L – news) (OXIG) 1,800.00p +3.15%
Kenmare Resources (LSE: KMR.L – news) (KMR) 18.90p +2.89%

FTSE 250 – Fallers
ICAP (Berlin: GBNA.BE – news) (IAP) 432.80p -4.31%
Kentz Corporation Ltd (LSE: KENZ.L – news) . (KENZ) 664.00p -3.14%
FirstGroup (Dusseldorf: FGR.DU – news) (FGP (BSE: FGP.BO – news) ) 136.80p -3.12%
Domino Printing Sciences (Other OTC: DMIPY – news) (DNO) 824.50p -2.94%
Xaar (XAR) 1,011.00p -2.79%
Bank of Georgia Holdings (BGEO) 2,328.00p -2.55%
Big Yellow Group (BYG) 501.00p -2.15% Group (MONY) 192.20p -1.69%
Petra Diamonds Ltd (LSE: PDL.L – news) .(DI (KSE: 003160.KS – news) ) (PDL) 122.50p -1.61%
Home Retail Group (Frankfurt: PZR.F – news) (HOME) 204.40p -1.54%