(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
* FTSE 100 down 0.2 pct
* HSBC down 6.3 percent after profit slump
* Mediclinic down after Middle East revenue drops
* Oil services firm Wood Group top mid-cap faller
* FTSE 350 banks index heads for worst day since Brexit
By Helen Reid
LONDON, Feb 21 British shares lost 0.2 percent
on Tuesday, weighed by banking stocks as a week of full-year
earnings releases for major listed banks began with HSBC's
Britain's blue-chip FTSE index was down 0.2 percent,
with HSBC, the first bank to report earnings this week,
down 6.5 percent, heading for its worst day in 18 months after
its results. The bank has a more than 6 percent weighting on the
HSBC kickstarted a string of major bank earnings updates by
announcing a 62 percent slump in profits for 2016, falling short
of analysts' estimates due to writedowns from
"The group flagged multiple headwinds (totaling $3 billion)
for 2017. We believe the key question is to what extent the
group will be able to offset these through volume growth," said
Goldman Sachs analysts in a note.
HSBC shares had rallied 70 percent from April 2016 to
Hargreaves Lansdown and Standard Chartered Bank
tracked HSBC lower. Hargreaves Lansdown was also
smarting from a downgrade to "underperform" by Bernstein.
The FTSE 350 banking index .FTNMX8350 was down 3.7 percent,
headed for its worst day since the Brexit referendum aftermath
at the end of June 2016. Lloyds, Barclays, RBS and Standard
Chartered will post full-year results in the coming days.
"It will be interesting to see how the other banks perform,
because HSBC might have a competitive advantage because of its
Asia focus and diversification," said Ipek Ozkardeskaya of LCG
Mediclinic was down 4.7 percent after the South
African private healthcare provider said it expected a drop in
revenue and margins at its Middle East business.
Miners Anglo American and Fresnillo were
among top fallers, despite a solid results update from the
Anglo American posted a 25 percent profit increase in
results, saying it would resume dividends by the end of 2017. It
had cut net debt to $8.5 billion, and said it would sell further
assets only to sharpen its focus, rather than because it needed
"We are encouraged by free cash flow, deleveraging and
diamonds. However, near term we are concerned Anglo is
vulnerable to negative spot price momentum and South Africa
headwinds," wrote UBS analyst Myles Allsop in a note.
The stock was down 1.8 percent. Announcing a wind-down of
asset sales could be raising investors' concerns about the
strength of Anglo's balance sheet, Ozkardeskaya said.
Rolls-Royce was the top gainer in the blue-chip
index, maintaining Monday's momentum after a Goldman Sachs
upgrade to "buy". Educational publisher Sage Group was
also a top gainer, benefiting from Stifel starting coverage on
the stock with a "buy" rating, up 2.3 percent.
Oil services company Wood Group was the worst
performing on the mid-cap FTSE 250 index, down 7.8
percent and headed for its biggest one-day drop since July 2011,
after it posted a 62 percent fall in full-year profit, missing
market estimates, citing a challenging oil and gas market.
(Reporting by Helen Reid; Editing by Alison Williams)