Reuters: Hot Stocks: UK's FTSE steadies near 2-month highs as Lloyds rises

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UK's FTSE steadies near 2-month highs as Lloyds rises Aug 5th 2013, 10:59 Mon Aug 5, 2013 6:59am EDT * FTSE 100 flat, steadying near 2-month highs * Lloyds rises around 4 pct on bullish dividend prospects * HSBC falls after H1 profit misses market consensus By Sudip Kar-Gupta LONDON, Aug 5 (Reuters) - Britain's benchmark equity index steadied on Monday near its highest level in around two months, propped up by gains at part-nationalised bank Lloyds. However, a 4 percent fall at rival bank HSBC - one of the UK's biggest stocks by market capitalisation - pushed the index off intraday highs after HSBC's interim profits missed the market consensus forecast. The blue-chip FTSE 100 was flat at 6,647.70 points in mid-session trade, steadying near two-month highs of around 6,697 points reached last week. Lloyds, 39 percent owned by the UK government after a state bailout during the 2008 financial crisis, rose 4 percent to add the most points to the FTSE on expectations it could pay out up to 70 percent of its earnings in dividends by 2015. Brown Shipley fund manager John Smith said that despite signs of a recovery at Lloyds and part-nationalised Royal Bank of Scotland, his portfolio was "underweight" UK bank stocks. Smith said there was still too much political risk dogging the sector, with the UK government looking for ways to start to sell its stakes in Lloyds and RBS. "We're underweight in the banking sector. There's still too much political interference," said Smith. The FTSE 100 raced to a 13-year high of 6,875.62 points in late May before falling back in June, but the index remains up by around 13 percent since the start of 2013. Richard Hunter, head of equities at Hargreaves Lansdown, said expectations that major world central banks would stick with economic stimulus policies would continue to support equities in the near term. (additional reporting by David Brett; Editing by Ruth Pitchford) Link this Share this Digg this Email Reprints

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