* 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 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
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
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