FTSE edges down from one-year high, earnings weigh

By Kit Rees and Atul Prakash LONDON (Reuters) - Britain's top share index dipped on Thursday after hitting a one-year high in the previous session, with Lloyds, Smith & Nephew and Royal Dutch Shell falling after poorly received trading updates. The blue-chip FTSE 100 <.FTSE> index was down 0.4 percent at 6,721.06 points at its close. The mid-cap index <.FTMC> also fell 0.1 percent, weighed down by a 24.7 percent slide in lender International Personal Finance , which slumped after reporting a 29 percent fall in adjusted profit before tax. The FTSE 100, whose international companies are less exposed to any weakness in the domestic economy arising from Brexit, is up 6 percent since the Brexit vote, while the domestically-focused mid-cap index closed 0.6 percent below its pre-Brexit level. "The FTSE 100 is seeing some weakness as earnings from some heavyweight companies have disappointed. Given the recent run higher..., it would not be surprising to see a further pullback in the next sessions," said Jawaid Afsar, senior trader at Securequity. But he said further rises could be on the cards, with 6,900 a target in the next few weeks. The biggest decliner was Lloyds Banking Group , which dropped 5.8 percent after saying that capital generation could be lower as it steps up its cost cutting plans, with investors citing concerns about its ability to maintain its dividend. "Lloyds still has a robust capital position ... However, lower capital generation impinges on the bank’s ability to return cash to shareholders," said Laith Khalaf, senior analyst at Hargreaves Lansdown. "Lloyds has increased its interim dividend significantly, but if the Brexit axe is to fall anywhere, it’s likely to be on the special dividend at the end of the year." Shares in Smith & Nephew fell 5.6 percent after Europe's biggest maker of artificial knees and hips said it was continuing to struggle with weak demand for its products in China. Royal Dutch Shell fell 2.9 percent after reporting a fall of more than 70 percent in quarterly profit, far worse than analyst estimates. The blue-chip FTSE index was underpinned by a sharp rally in the shares of some companies following updates. Engineering firm Rolls-Royce surged 13.5 percent after reaffirming profit would improve in the second half of the year. It also said its turnaround plan would deliver cost cuts at the top end of a guided range. Likewise, pharma company AstraZeneca closed at a record high, jumping more than 7 percent following a solid set of results. Miner Anglo American was up 5.4 percent after saying its net debt had fallen and that a cost-cutting and asset-sale strategy was on track. (Reporting by Atul Prakash; Editing by Kevin Liffey)