Britain's FTSE softens as BoE chief sees no need for more QE
* FTSE 100 down 0.4 pct
* On track for first weekly loss in a month
* Goldman upgrade boosts Travis Perkins
By Toni Vorobyova
LONDON, Sept 27 (Reuters) - Britain's FTSE softened early on Friday, pegged back after the governor of the Bank of England said that an improving economy means there is no need for a fresh dose of stimulus.
Mark Carney told a regional newspaper that he did not see a case for more bond purchases. Such stimulus from the BoE and other global central banks has been a key driver of equity markets gains over the past year so stocks have tended to react nervously to any signs of it being scaled back.
"If you take the UK data at face value, the optical strength of the economy does make asset purchases much less likely, so as you can see from the equity market, we've started off to the downside," said Jeremy Batstone-Carr, director of private client research investment strategy at Charles Stanley.
"We are quite cautious (on equities)."
The FTSE 100 edged down 23.29 points or 0.4 percent to 6,542.30 points, heading for its first weekly loss in a month and trying for a fourth straight session to convincingly break below technical support at the 20-day moving average.
If the removal of stimulus comes as a result of a stronger economy, it is not necessarily bad news for companies and their shares. Such signs of economic improvement came on Friday from Nationwide data showing British house prices rising strongly for a fifth month in September.
Signs of economic improvement prompted analysts at Goldman Sachs to recommend stocks exposed to the economic cycle, leading to upgrades on Travis Perkins among others. Shares in Britain's biggest supplier of building materials added 1.5 percent, making it the top riser on the FTSE.
On the flip side, miners, a sector traditionally very sensitive to swings in risk appetite, led the FTSE fallers.
Adding to broad investor caution were concerns about fiscal policy in the United States, where a federal government shutdown and debt default are on the cards in coming weeks unless politicians can agree on the budget and raise the debt ceiling.
"Investors are largely adopting a wait-and-see attitude ... and hold off from committing significant positions," said Kash Kamal, analyst at Sucden Financial. (Editing by Catherine Evans)
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