* FTSE 100 down 0.3 pct
* HSBC down 6.5 percent after profit slump
* Mediclinic down after Middle East revenue drops
* Oil services firm Wood Group top mid-cap faller
* FTSE 350 bank index scores worst day since Brexit
(Adds closing prices)
By Helen Reid
LONDON, Feb 21 British shares fell 0.3 percent
on Tuesday, dragged down by banking stocks as a week of
full-year earnings releases for major listed banks began with a
profit slump for HSBC.
The blue-chip FTSE index fell 0.3 percent, with HSBC
down 6.5 percent, its worst day in 18 months, after its
results. The bank has a more than 6 percent weighting on the
HSBC announced a 62 percent slump in profits for 2016, worse
than analysts were expecting, 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
Financial services company Hargreaves Lansdown and
Standard Chartered Bank tracked HSBC lower. Hargreaves
Lansdown was also smarting from a downgrade to "underperform" by
The FTSE 350 banking index was down 3.9
percent, 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 6 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
also weaker, despite a solid results update from the former.
Anglo American posted a 25 percent profit increase and said
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 the money.
"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 0.9 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 rose 3.5 percent, maintaining Monday's
momentum after a Goldman Sachs upgrade to "buy". Educational
publisher Sage Group was also a top gainer, up 2.3
percent after Stifel started coverage on the stock with a "buy"
Oil services company Wood Group was the worst
performer on the mid-cap FTSE 250 index, down 7.9
percent and scoring 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; additional reporting by Danilo
Masoni; Editing by Mark Trevelyan)