UPDATE 2-UK shares outshine as Europe hovers below record highs

* Banking stocks among biggest decliners on benchmark index
* Trading volumes thin as holidays approach
* Infrastructure group Atlantia pressures Italian index
* Britain's NMC jumps on independent review of books

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By Sruthi Shankar
Dec 23 (Reuters) - European shares closed a sliver away from
all-time highs on Monday, as a slide in eurozone banks countered
optimism over the U.S.-China trade deal and a stellar run for
UK shares.
With trading volumes dwindling as investors leave on
Christmas holidays, analysts warn that market action could be
volatile. The pan-European STOXX 600 index .STOXX saw trading
volume down to 63% of its thirty-day moving average on Monday.
The index closed flat after hitting a new record earlier in
the session, aided by a ninth straight day of rise for Britain's
FTSE 100 .FTSE and defensive buying that boosted Europe's
healthcare stocks .SXDP and Swiss equities index .SSMI .
"Unsurprisingly, there has not been much news to drive the
market forward, but hopes of a U.S.-China deal continue to be
dangled like a carrot in front of investors," Chris Beauchamp,
chief market analyst at IG wrote in a client note.
U.S. President Donald Trump on Saturday said Washington and
Beijing would "very shortly" sign their so-called Phase One
trade pact. Giving investors more reason to cheer, China's finance
ministry said on Monday it would lower tariffs next year on U.S.
products ranging from frozen pork and avocado to some types of
semiconductors. However, trade-sensitive German .GDAXI and French .FCHI
shares moved little on the news. The star performers were UK
mid-cap shares .FTMC , which jumped 0.8% and the blue-chip
index .FTSE , which gained 0.5%, as investors stuck to hopes
that Britain will exit the European Union by 2020.
NMC NMC.L , whose shares have nearly halved in value since
last week after Muddy Waters criticised the healthcare group's
financials, shot up 37% after launching an independent review of
its books. Shares in aerospace parts makers such as Senior Plc SNR.L ,
Melrose Industries MRON.L and Meggitt MGGT.L rose between
1.3% and 2.8% after U.S. planemaker Boeing Co BA.N ousted
Chief Executive Dennis Muilenburg following a production halt of
its best-selling 737 MAX jetliner after two fatal crashes.

Eurozone banks .SX7E dropped about 1%. European Central
Bank's (ECB) governing council member Klaas Knot said interest
rates in the euro zone could remain historically low for years,
but the ECB's ultra-loose monetary policy risks becoming
counterproductive. A 4.9% decline for Italian infrastructure group Atlantia
ATL.MI pressured the wider country index .FTMIB .
On Saturday, a report said the Italian government had
provisionally approved a document to make it easier to revoke
concessions to operate motorways. The decree does not mention
Atlantia, but a government source told Reuters that the measures
could be applied to it.
Lufthansa LHAG.DE dropped 1.3% after German cabin crew
union UFO said arbitration talks with the company had failed and
its members could stage strikes any time from now on, barring
Dec. 24, 25 and 26.