* FTSE 100 up 0.5 pct; HSBC adds most points
* Intertek up after dividend hike
* Technical buying helps buoy index after sharp drop
By Tricia Wright
LONDON, Aug 4 (Reuters) - Britain's top share index halted a three-day losing streak on Monday, bolstered by HSBC as investors bought into beaten-down shares in the bank after it posted first-half results.
HSBC rose 2.1 percent, contributing a third to the FTSE 100's points gain, in spite of a 12 percent drop in pretax profits in the six months to the end of June, just below analysts' forecasts.
HSBC shares initially dropped 2 percent after the results. But they soon gathered steam as investors focused on its positives, namely ongoing balance sheet strength and an attractive dividend yield, and bought back into the shares which have fallen some 17 percent since a peak seen in May 2013.
"The headline figures are negative... but there are mitigating factors... A very strong balance sheet, and a dividend yield of nearly 5 percent which has got its obvious attractions in the current interest rate environment," Richard Hunter, head of equities at Hargreaves Lansdown, said.
"A 'strong hold' is the current (market) consensus. I can see some upgrades to that consensus providing that investors are prepared to take a longer view."
Gains were seen across the banking sector, with Lloyds Banking Group up 1.7 percent, Royal Bank of Scotland 1.3 percent firmer, and Barclays, up 1.2 percent.
The broader FTSE 100 was up 30.75 points, or 0.5 percent, at 6,709.93 points by 1115 GMT, recovering after a 1.7 percent drop last week, helped also by technical buying having climbed above a major support level on Friday - its 52-week moving average of 6,670 points.
Intertek, which tests goods to check they comply with regulatory standards, led the blue chips higher with a 4 percent gain as it raised its interim dividend by 6.7 percent to 16 pence per share and said it was on track to deliver single digit organic revenue growth.
Despite a second-quarter reporting season that has seen 53 percent of the 108 companies in the STOXX Europe 600 reporting estimate-beating earnings, according to StarMine data, shares across the region fell sharply last week.
Investor appetite has been sapped by the prospect of a tightening in U.S. monetary policy following strong data, as well as by geopolitical concerns ranging from tensions between Russia and the West over Ukraine to Israel's shelling of Gaza.
Charles Stanley's technical analyst Bill McNamara reckons the FTSE 100's downtrend will soon resume.
"I'm becoming concerned about its loss of momentum over recent sessions," McNamara said. "I remain very cautious on the UK market at the moment and my own sense is that we are going to see further weakness before we see it back up towards the high."
Among mid-caps, engineer Balfour Beatty rose 2 percent as the Sunday Telegraph reported UK engineering firm WS Atkins and Canada's WSP Global are vying for control of its engineering and design business. (Additional reporting by Francesco Canepa; Editing by Janet Lawrence)