* FTSE 100 closes up 0.2 pct at 6,570.95 points
* Citigroup stays bullish, sees FTSE at 7,000 end-2013
* Barclays slumps 5.7 pct after capital hike
* GKN and ITV surge after their results beat forecasts
By Sudip Kar-Gupta
LONDON, July 30 Upbeat earnings from leading companies nudged Britain's benchmark equity index higher on Tuesday, enabling the market to offset a slump in Barclays after the bank announced plans for a $9 billion capital hike.
The blue-chip FTSE 100 index closed up 0.2 percent, or 10.70 points, at 6,570.95.
Engineer GKN topped the leaderboard with a 6.5 percent rise after better-than-expected interim profits, while media group ITV rose 6.3 percent after also beating forecasts with its results.
Barclays, however, tumbled 5.7 percent after announcing plans to raise 5.8 billion pounds ($8.90 billion) to strengthen its capital position.
Sucden Financial trader Mike Mason said that while many leading companies had beaten expectations with their results, that had yet to feed through to the broader economy since companies were not necessarily creating jobs.
Still, Citigroup European equity strategist Jonathan Stubbs remained bullish on the FTSE 100, arguing investors should use days when the market fell to buy up stocks on the cheap.
"We stick with our 'buy the dip' strategy and target the FTSE at 7,000 at end-2013," he said.
UK banks' capital shortfall calculator:
HSBC OUTPERFORMS WEAKER BANKS
The blow to Barclays hit other domestic banks, with part-nationalised lenders Royal Bank of Scotland and Lloyds falling 2.5 percent and 1.5 percent respectively due to worries that they may also have to raise more capital.
"The Barclays news is depressing the banking sector somewhat as fears spread about balance sheet issues," said Sucden Financial's Mason.
However, leading global bank HSBC rose 1.1 percent to add the most points to the FTSE 100, and Hartmann Capital trader Basil Petrides said HSBC had benefited from investors switching out of Barclays and into HSBC.
"It's better to go into a company with a far stronger capital position, such as HSBC," he said.
The FTSE 100 hit a 13-year high of 6,875.62 points in late May, but then fell to 5,897.81 points in June as expectations of a gradual scaling-back of stimulus measures by the U.S Federal Reserve caused an equities sell-off.
The Fed meets this week and investors will be looking for more clues on when it might start withdrawing stimulus.
The FTSE 100 is still up 11 percent since the start of 2013, but EGR Broking managing director Kyri Kangellaris said its failure to recapture the highs of May meant the index would not make much headway in the near term.
"The market is struggling to make new highs, which could be a sign of a potential sell-off," he said. ($1 = 0.6515 British pounds) (Additional reporting by Tricia Wright; Editing by Susan Fenton)