HSBC hinders Britain's FTSE near all-time high

LONDON: A drop in HSBC hindered Britain's top share index on Monday, falling short of an all-time record high even as a last minute deal to secure an extension to Greece's financial rescue package boosted sentiment.

Britain's FTSE rose 0.4 percent in early deals to hit a new 15 year high of 6,943.61, just 0.1 percent shy of an all time high of 6,950.60 set in December 1999.

However, gains were quickly pared when HSBC, Europe's largest bank, reported a 17 percent drop in annual profit at 0815 GMT, sending its shares down 5.5 percent to its lowest since October 2012.

The bank also said it regretted and apologised for conduct and compliance failures at its Swiss private bank. It emerged over the weekend that its chief executive holds an account in Switzerland to hold bonus payments.

"The worry now is going to be the opening of regulatory investigations. The uncertainty will continue, and the downside is likely to persist," Zeg Choudhry, managing director of LONTRAD, said.

"They're going to be under a cloud for some time."

HSBC, one of the biggest stocks on the FTSE 100, trimmed over 25 points off the index, which was down 5.10 points, 0.1 percent lower, at 6,910.10 by 0854 GMT.

The index underperformed continental euro zone peers, with the euro zone blue chip Euro STOXX 50 boosted by news of a last minute deal over Greek debt.

Euro zone finance ministers agreed in principle on Friday to extend Greece's financial rescue by four months, averting a potential cash crunch in March that could have forced the country out of the currency area.

The accord requires Greece to submit by Monday a letter to the Euro group listing all the policy measures it plans to take during the remainder of the bailout period.

"Hopes are, however, clearly running high that international creditors will feel benevolent enough to help pull Greece over the next hurdle," Tony Cross, market analyst at Trustnet Direct, said.

"Given that each parliament in the Euro group will need to ratify the proposals, this is far from being certain."

Among individual risers, business supplier Bunzl gained 1.8 percent after it posted an 11 percent rise in profit at constant exchange rates and said it expected further growth in 2015, both in its existing business and from acquisitions.