* FTSE 100 flat after 1.7 pct drop last week
* HSBC up; focus on balance sheet strength, dividend yield
* Intertek recovers poise, boosted by dividend hike
By Tricia Wright
LONDON, Aug 4 Britain's top share index steadied
after three straight days of falls on Monday, propped up by HSBC
as investors bought into the bank's beaten-down shares after it
posted first-half results.
The index heavyweight rose 0.9 percent in spite of a 12
percent drop in pretax profits in the six months to the end of
June to $12.3 billion, just below analysts' forecasts.
Its shares initially dropped 2 percent after the results.
But investors soon focused on the bank's balance sheet strength
and an attractive dividend yield, and bought back into the
shares, which have fallen some 17 percent from a peak in May
"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 investors are
prepared to take a longer view."
The broader FTSE 100 closed down a minuscule 1.66
points at 6,677.52, having dropped 1.7 percent last week.
Intertek, which tests goods to check they comply
with regulatory standards, led blue chips higher with a 6.8
percent gain, bouncing off a two-year low hit last week, 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
Shares across the region fell sharply last week despite a
second-quarter reporting season in which 53 percent of the 108
companies in the STOXX Europe 600 have reported
estimate-beating earnings so far, according to StarMine data.
Investor appetite has been sapped by the prospect that
strong economic data is bringing a period of exceptionally loose
U.S. monetary policy towards its close. International strains
over Ukraine and Gaza are also keeping markets wary.
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 1.8
percent after 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 Ruth