Top global miner BHP Billiton [ BHP 78.45  -0.05 (-0.06%) ] on Wednesday signaled caution over a sustained global recovery and held off from a share buyback after reporting its weakest first-half profit in four years.

Its July-December profit nevertheless beat market forecasts by 11 percent, and the company was able to step up its dividend slightly -- sending its shares up 3 percent.

Fund managers said they were not disappointed BHP had not gone ahead with a share buyback, which analysts had flagged might be possible, and said it was wise to keep its powder dry.

"There's still a tone of caution to their commentary," said Adam Dixon, a portfolio manager at Ausbil Dexia.

"With such a large number of reinvestment opportunities, they're just going to play the conservative angle until they gain more confidence in the global economic recovery."

BHP warned the pace of monetary tightening and the rate of loan growth for commodity-intensive sectors in China, its biggest customer, would be critical, and was wary about the speed and strength of recovery in developed economies.

"We do not expect China to stop lending," BHP Billiton said. "However, reduced credit liquidity in key segments of the commodity market may have a flow-on impact on prices."

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