>>4402645I'd look into the Lumix LX series, my recommendations from experience would be the LX3 or LX5.
They're pocketable, have decent image quality, RAW support, can take up to 32gb SD cards, have half decent stabilisation (up to 1/10s handheld) and you can turn off that red light.
I got mine for about 85 eurobucks but they might be a bit more expensive now.
Alternative is the Canon S95 which is pretty good I hear.
Pic related is from my LX3
