By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- London stocks tracked the rest of Europe lower on Monday, as supermarket stocks proved a drag, but the main U.K. index was still set to finish the year around 14% higher.

The FTSE 100 index eased 0.4% to 6,726.01 after finishing last week up 2.2%.

Retailers were the weak link on Monday, with Marks & Spencer Group PLC down 1.4%, J Sainsbury PLC off 1.2% and Wm Morrison Supermarkets PLC slipping over 1%. Related decliners included Associated British Foods PLC , which fell 1%.

Trading volumes are low as investors wind down 2013, with many gone until after the New Year. But investors should take care with the big gains that have been made recently across all markets, said Craig Erlam, market analyst with Alpari, in a note.

"We should be a little careful...as these gains have come at a time when trading volumes have dropped significantly, owing to the festive period, which can sometimes be followed by sharp reversals as volumes pick up again," said Erlam.

Shares of Anglo American PLC rose nearly 2%, outperforming the rest of the mining sector, which was flat to weaker. HSBC Holdings PLC eased 0.5%, while British American Tobacco PLC dropped over 1%.

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