UPDATE 1-FTSE creeps higher, technical levels lend support
* FTSE 100 up 0.3 percent
* 50-day moving average, at 6,451, to provide support
* Fresnillo, Randgold up, bolstered by gold price (Updates prices)
By Tricia Wright
LONDON, Aug 16 (Reuters) - Britain's blue chip shares crept higher on Friday, finding technical support after suffering their steepest one-day percentage drop in almost two months in the previous session.
The FTSE 100 closed up 16.65 points, or 0.3 percent, at 6,499.99 points, having fallen 1.6 percent on Thursday. Analysts said that the 50-day moving average, currently at 6,451, would provide short-term support.
Should the index close below this level, then the immediate levels of support on the way down are 6,400, previously resistance, followed by the 200-day moving average, currently at 6,292, according to GFT Markets analyst Fawad Razaqzada.
"Although my long-term outlook is still bullish on the FTSE, I will feel the same way about the near-term trend if and when the index takes out 6,640."
The steep falls on Thursday came after robust U.S. jobless claims data, which fuelled concern the U.S. Federal Reserve might, from next month, start cutting back its stimulus - one of the major drivers of this year's equity market rally.
This trimmed the UK benchmark's gains this year to around 10 percent, taking it down about 6 percent from the year's high of 6,875.62 points set in late May.
"Quite a few valuations have started to look quite full so it feels like maybe there's a bit of taking profits in some shares," Smith & Williamson fund manager Tineke Frikkee said.
Frikkee has bought into Tui Travel, which is looking better value after sharp falls on Thursday along with the wider market and on the back of concerns over Egyptian holiday bookings in light of the violence in the country.
The company now trades on a 12-month forward price/earnings ratio of about 11.5 times against the FTSE 100 on about 12 times, according to Thomson Reuters Datastream.
Paul Kavanagh, a partner at Killik & Co, said: "I would say that the nearer (the FTSE 100) gets back down to 6,000 again the more aggressively positioned one would be ... because you would start to see some valuations coming back into stronger buy territory."
Kavanagh sees opportunities in the mining sector, the biggest fallers this year by some margin, with the FTSE 350 Mining index down about 13 percent.
Over the period, the STOXX 600 Basic Resources index's 12-month forward price/earnings ratio has fallen to 10.5 times from 11.3 times, according to Thomson Reuters Datastream.
Gold miners Randgold Resources and Fresnillo were among the top risers, with respective gains of 5.3 percent and 4.2 percent, after gold hit a two-month high earlier on Friday. (Reporting by Tricia Wright, additional reporting by Francesco Canepa; Editing by Susan Fenton)
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