UPDATE 2-UK shares surge as upbeat factory activity data lifts global sentiment; HSBC drags

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* HSBC slides to over 11-year low as profit plunges 65%
* UK, euro zone, U.S. report rise in factory output
* Engineer Senior, insurer Hiscox swing to first-half loss
* FTSE 100 up 2.3%, FTSE 250 gains 1.3%

(Updates to close)
By Sagarika Jaisinghani and Susan Mathew
Aug 3 (Reuters) - London's FTSE 100 posted its best session
in seven weeks on Monday as an uptick in UK factory activity
tied in with similar data from Germany and United States to
raise economic recovery hopes, although HSBC's slide after
results capped gains.
Lender HSBC HSBA.L slid 2.9% to its lowest since 2009 as
the coronavirus crisis saw it flag mounting bad debt charges and
miss profit expectations, sending the FTSE 100 .FTSE to its
lowest since mid-May, before sentiment turned. After marking its worst week since mid-June on Friday, the
blue-chips index closed up 2.3%.
Data showed British manufacturing output last month grew at
its fastest pace in nearly three years, while Germany reported
an expansion for the first time since 2018. Earlier in the day,
China - one of UK's major trading partners, also reported growth
in factory output. In the United States, a survey showed manufacturing activity
accelerated to its highest level in nearly 1-1/2 years in July
despite a resurgence in new COVID-19 cases. "The risk of further restrictions and lockdowns will
continue to be a huge cloud of uncertainty for many industries,
but after months of disruption, there may be a sense of relief
at this data," said Craig Erlam, senior market analyst at OANDA
Europe.
Material stocks .FTNMX1770 were the biggest boosts as iron
ore prices rose, followed by the healthcare sector. AstraZeneca
AZN.L jumped 2.8%. IRONORE/
The domestically-focussed FTSE 250 .FTSE rose 1.3%,
breaking a three-session losing streak.
A rally in UK stock markets had stalled in July as
confidence in a post-pandemic economic recovery was dulled by
dour corporate forecasts and fears of a second COVID-19 wave.
All eyes will be on a Bank of England policy meeting later
in the week, where it is expected to shed more light on the pace
of an expected economic rebound. In results-driven moves, engineering firm Senior Plc SNR.L
and insurer Hiscox HSX.L slumped 15.1% and 3.4%, respectively,
after swinging to a first-half loss.