British shares drift lower, hit resistance as Fed concerns return
* FTSE 100 falls 0.2 percent
* Charts point to falls after index fails to break key levels
* Better growth outlook strengthens case for less stimulus
By Alistair Smout
LONDON, Aug 23 (Reuters) - Britain's top shares drifted lower early on Friday, failing to break technical resistance as concerns about a cut in U.S. monetary stimulus resurfaced a day after the index jumped on encouraging European economic data.
The FTSE 100 was set for its third straight week of falls, suffering along with other equity markets from bets the Federal Reserve will soon slow its bond buying programme.
The FTSE was down 0.2 percent at 6,432.00 by 0728 GMT, having gained 0.9 percent in the previous session - its biggest one-day gain since the beginning of the month.
The index was led lower by profit taking in banks and miners that had outperformed on Thursday on optimism over the growth outlook.
Its failure to end Thursday above Wednesday's opening level left the index vulnerable to further falls.
"I'm pretty sure I wasn't the only one surprised and somewhat caught out by this impressive recovery, but 'retake 6442 and 6459.5' was the bulls mission, and ...only one of these has been achieved," Clive Lambert, technical analyst at FuturesTechs, said.
"So... we are still (just about) siding with the bears, making this a selling opportunity."
The FTSE 100 has fallen 3 percent so far in August, as expectations have built that the Fed will start reeling in its quantitative easing programme in September.
The more positive outlook suggested by strong PMI data on Thursday was backed up on Friday by Germany's strongest quarterly expansion in more than a year, confirmed in a second reading of second quarter GDP data.
Some investors said this, along with U.S. jobs data pointing to quicker hiring there, could reduce the case for stimulus.
"Yesterday's bounce on good data also has the negative consequence of increasing the probability of tapering so any further gains may be limited," Jonathan Sudaria, sales trader at London Capital Group, said in a trading note. (Editing by John Stonestreet)