UK stocks were trading firmly in the red by Monday lunchtime with less than 24 hours to go before the US fiscal cliff deadline, when 600bn dollars in automatic spending cuts and tax increases come into effect.Markets were even shrugging off some upbeat economic data from Asian powerhouse China overnight, where the final reading of the HSBC manufacturing purchasing managers' index was revised higher from 50.9 to 51.5, the highest level since May 2011.However, despite the political uncertainty Stateside, stock futures were pointing to a positive start on Wall Street as investors looked ahead to an eleventh-hour Senate meeting in Washington with optimism.Without a deal to avert the fiscal cliff by tomorrow, analysts widely expect the US economy to plunge back into recession and the jobless rate to rise back above 9%."Given that this is an entirely man-made scenario, it was largely expected that a resolution could be found relatively easily, with Barack Obama citing Christmas as his internal deadline to find a deal when taking office for his second term," said research analyst Joshua Mahony from Alpari."However, the current climate is a true reflection of the inadequacies of the US political system as the country has been held hostage by political brinkmanship which looks set to punish those who as Obama says need the tax cuts the most," he said.With Democrat and Republican leaders being able to strike an accord during various meetings this weekend, the Senate will resume its session at 11:00 Washington time.In other news, German Chancellor Angela Merkel is expected to say this evening in her televised New Year's speech that "the Eurozone crisis is far from over"."The reforms that we've agreed on are starting to take effect. Nevertheless, we still need a lot of patience. The crisis is far from over," she is scheduled to say.Banks and miners provide a dragWith very few corporate updates or results released this morning, the fiscal cliff issue continues to dominate market sentiment with cyclical sectors such as mining and banking bearing the brunt of the selling. Mining peers Anglo American, Rio Tinto and Antogasta were registering losses despite metals prices making gains, while banking group HSBC, Lloyds and Standard Chartered also took a hit.Hochschild Mining, the precious metals company, fell after saying that its wholly owned subsidiary, Alberta, has satisfied the conditions of its previously announced offer to acquire all of the outstanding shares of Adina Minerals.Sector peer Bumi was flat after confirming that CEO Nalin Rathod will step down from the role today and be succeeded by Nick von Schirnding.Gas giant BG Group gained after securing a loan worth $1.8bn from the Export-Import Bank of the US. The loan has been taken to both diversify its funding plans and to support the export of US services and equipment for the ongoing delivery of the Queensland Curtis LNG project in Australia which is on schedule for first gas in 2014. Prudential was flat on the back of weekend reports that it could be break up next year as part of Chief Executive Tidjane Thiam's structural review of the insurance company.Consumer packaging giant Rexam fell this morning after saying that it had completed the disposal of its Personal Care division for £439m, selling off the Cosmetics, Toiletries and Household care products business to Sun European Partners.Shares in Max Petroleum got a boost after the oil and gas exploration and production company, which is focused on Kazakhstan, announced positive initial results from the the ESKN-1 exploration well in the Eskene North prospect. FTSE 100 - RisersBritish American Tobacco (BATS) 3,132.50p +0.77%Johnson Matthey (JMAT) 2,375.00p +0.64%Polymetal International (POLY) 1,175.00p +0.51%Smiths Group (SMIN) 1,197.00p +0.50%Kingfisher (KGF) 283.30p +0.50%BG Group (BG.) 1,012.50p +0.45%Kazakhmys (KAZ) 780.50p +0.45%Evraz (EVR) 258.00p +0.43%GKN (GKN) 230.90p +0.35%Aggreko (AGK) 1,746.00p +0.34%FTSE 100 - FallersMelrose Industries (MRO) 225.10p -2.85%Wood Group (John) (WG.) 726.50p -1.82%Capital Shopping Centres Group (CSCG) 351.80p -1.68%Hammerson (HMSO) 487.70p -1.38%Admiral Group (ADM) 1,161.00p -1.28%Amec (AMEC) 1,002.00p -1.18%Land Securities Group (LAND) 810.50p -1.16%Vedanta Resources (VED) 1,150.00p -0.95%Schroders (SDR) 1,691.00p -0.94%BAE Systems (BA.) 337.80p -0.94%FTSE 250 - RisersDomino Printing Sciences (DNO) 595.00p +4.94%New World Resources A Shares (NWR) 331.00p +4.75%Stobart Group Ltd. (STOB) 104.70p +2.65%JD Sports Fashion (JD.) 699.00p +2.49%KCOM Group (KCOM) 72.00p +2.13%Petropavlovsk (POG) 359.10p +2.08%Renishaw (RSW) 2,067.00p +2.02%ITE Group (ITE) 243.60p +2.01%Kier Group (KIE) 1,326.00p +1.84%Marston's (MARS) 122.60p +1.83%FTSE 250 - FallersMoneysupermarket.com Group (MONY) 156.00p -4.24%Hansteen Holdings (HSTN) 77.60p -4.08%Hochschild Mining (HOC) 473.80p -3.01%Pace (PIC) 187.10p -2.81%Grainger (GRI) 116.40p -2.59%St. Modwen Properties (SMP) 224.50p -2.31%Great Portland Estates (GPOR) 486.00p -2.11%Big Yellow Group (BYG) 346.20p -1.93%Laird (LRD) 205.00p -1.91%Senior (SNR) 196.80p -1.75%BC