* FTSE 100 ends up 0.1 pct, near 8-month high
* ING sees FTSE hitting new 13-yr peak soon
* Deutsche Bank loss a bad omen for UK bank results
* Weir rises as data, Redburn point to sector pick-up
By Francesco Canepa
LONDON, Jan 20 Britain's FTSE 100
stalled near an eight-month high on Monday, held back by weak
banking shares as a surprise loss at Germany's Deutsche Bank was
seen as a bad omen for UK lenders' results.
Britain's main share index, however, was expected to resume
its uptrend soon and hit highs not seen since 1999, boosted by a
continued flow of money into European shares as the region's
Royal Bank of Scotland and Barclays shed 2
percent and 1.3 percent, respectively, after Deutsche Bank
announced a pre-tax loss for the fourth quarter.
The German bank blamed the loss on a fall in revenue at its
debt-trading divisions as well as costs for litigation and
Barclays and RBS, both due to report fourth-quarter earnings
next month, derive around 20 percent and 15 percent respectively
of total group income from trading in fixed income, currencies
and commodities (FICC), according to Shore Capital estimates.
Before Monday's falls, shares in the two UK banks had risen
6.1 percent and 7.6 percent respectively since the start of the
year, boosted by healthier prospects for the British economy.
"It would be sensible to expect weak performances from the
likes of Barclays and Royal Bank of Scotland in Q4," Gary
Greenwood, an analyst at Shore Capital, said. "The risk (for the
stocks) is to the downside given the rise that we've had."
Analysts at Goldman Sachs also warned that so-called
non-recurring items such as fines, provisions and charges, have
become a persistent feature of UK banks' results and raise
question marks over lenders' return on equity targets.
Commercial banks knocked a combined 8.2 points off the FTSE
100, which ended up 7.43 points, or 0.1 percent, at
6,836.73 points after hitting an eight-month high at 6,840
points on Friday.
The index has risen 1.3 percent so far this year and is just
0.5 percent away from a 13-year high of 6,875 hit in May, which
in turn is 1 percent off the index's all-time peak of 6,950
points, set in late 1999.
Technical charts on the FTSE were bullish after the index
broke through a trend-line connecting its May 2013 high and a
top made in October last week.
"It looks pretty solid and I believe the (2013) highs will
be broken within the next few days or weeks," Roelof-Jan Van den
Akker, senior technical analyst at ING, said.
While the FTSE, due to its global nature, has lagged most
other big European indexes since the start of this year, it is
still benefitting from a recent pick-up in economic data from
the euro zone, Britain's biggest trading partner.
Flows into Europe equity funds absorbed over $4 billion in
net investment inflows in the seven-day period to Jan. 15 -
recording their fourth-biggest weekly total on record, according
to fund-tracking firm EPFR Global.
Supporting the FTSE on Monday was oil & gas engineering firm
Weir, which rose 4.2 percent after data showed an
increase in the number of U.S. natural gas and horizontal rigs
last week and Redburn Partners initiated coverage of the stock
with "buy", citing improving activity in the sector.
Volume on Weir's shares was 70 percent higher than its
full-day average for the past three months, compared with FTSE
volume of around two thirds of the index's own average. Trading
was quiet due to U.S. stock markets being shut for a holiday.
Gold miners Fresnillo and Randgold were the
top FTSE risers as gold hit a six-week high and data showed
hedge funds and money managers raised their bullish bets on the
metal for a third consecutive week.