By Alistair Smout

LONDON (Reuters) – A drop in HSBC (HSBA.L) shares on Monday stalled attempts by Britain’s top index to hit record highs, even efforts to seal a Greek financial rescue package lifted other European markets.

The blue-chip FTSE 100 (.FTSE) index initially rose 0.4 percent in early deals to hit a new 15 year high of 6,943.61, just 0.1 percent shy of its record intraday high of 6,950.60 set in December 1999.

However, those gains were quickly pared when HSBC, Europe’s largest bank, reported a 17 percent drop in annual profit, sending its shares down 5.5 percent to the lowest level since October 2012.

That weighed on the overall UK market, leaving the FTSE 100 down by 0.2 percent at 6,902.36 points by the middle of the trading session.

HSBC said it regretted and apologised for conduct and compliance failures at its Swiss private bank.

“The worry now is going to be the opening of regulatory investigations. The uncertainty will continue, and the downside is likely to persist,” said LONTRAD managing director Zeg Choudhry, commenting on HSBC’s results.

LLOYDS RISES

Rival bank Lloyds (LLOY.L) rose 1.5 percent. Britain raised 500 million pounds through the sale of another 1 percent stake in the bank, which was bailed out during the financial crisis of 2007-2009. Traders were looking forward to Lloyds’ likely announcement of its first dividend since that rescue later this week.

The FTSE underperformed continental euro zone peers. Germany’s DAX (.GDAXI) rose 0.5 percent, having earlier hit a new record high, while France’s CAC (.FCHI) rose 0.4 percent.

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

However, the accord requires Greece to submit by Monday a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period. Germany said it expected the plan to be “coherent and plausible”.

Despite such tensions, many traders said it was only a matter of time before the FTSE breached new record highs in the 7,000 point region.

“Any dip is a buying opportunity,” said Novum Securities’ technical analyst Adrian Slack.

(Editing by Toby Chopra/Ruth Pitchford)