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FTSE supported by oil stocks; HSBC eases

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By Reuters
FTSE supported by oil stocks; HSBC eases
A broker reacts on the IG Index the trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson   -   Copyright  SIMON DAWSON(Reuters)

By Danilo Masoni

MILAN (Reuters) – The UK’s top share index was steady on Monday as gains in energy stocks on higher oil prices were offset by weaker mining stocks, while HSBC <HSB.MT> fell after its earnings update failed to impress.

The FTSE 100 <.FTSE> was unchanged at 7,660.9 points by 0838 GMT, also supported by a further fall in the pound on worries over the country’s exit from the EU, although the index remained within the tight range it has been moving in over the past few weeks. Mid caps <.FTMC> added 0.06 percent.

HSBC <HSBA.L> fell 0.6 percent, following mixed results.

Europe’s biggest bank, HSBC posted a small rise in first-half pretax profit, as rising expenses from investments in a new growth strategy and a $765 million settlement for alleged mis-selling of U.S. mortgage securities ate into higher revenues.

“We do not see consensus moving much on these results and shares likely to be in a holding pattern until evidence of delivery on operating leverage,” said Jefferies analysts in a note, affirming their buy rating on the stock.

They said profit before tax beat expectations partly thanks to better credit income, while revenues missed forecasts.

Miners were also a weak spot as copper prices fell for a third session in four as the dollar ticked higher, although heavyweight oil companies BP <BP.L> and Royal Dutch Shell rose 0.9 and 0.6 percent respectively, as crude prices rose after Saudi crude production registered a surprising dip in July.

Among mid caps there were some outstanding fallers.

IWG <IWG.L> fell more than 20 percent after the provider of serviced offices abandoned takeover talks with its three remaining suitors.

Spire Health <SPI.L> also lost more than one fifth of its value to hit a record low after the healthcare firm warned of sharply lower full-year core earnings on lower referrals from the UK’s publicly funded healthcare system.

UK shares have outperformed their euro zone peers since the end of April, although some investors have turned less upbeat over their prospects. Credit Suisse downgraded UK equities to benchmark on Monday, citing their more cautious view on commodities and the expectation that sterling had already experienced most of its decline.

(Reporting by Danilo Masoni, Editing by William Maclean)