* FTSE 100 down 0.9 percent, led lower by miners
* Technical analysts remain bullish, Alpari targets 6,700
* SSE, Centrica rally after recent steep falls
By Tricia Wright
LONDON, Sept 27 (Reuters) - Britain's top share index was led lower by mining stocks on Friday, with persistent concern over budget and debt negotiations in Washington keeping investors on edge.
The UK benchmark was down 56.94 points, or 0.9 percent, at 6,508.65 by 1050 GMT, hit by a 2.2 percent drop in mining stocks as investors sold out of cyclical shares.
The fiscal issues which Washington is up against have increasingly unsettled investors since the U.S. Federal Reserve's surprise decision to keep its economic stimulus programme of bond-buying, which has driven a global equities rally, unchanged for now.
The lack of progress could lead to a Federal shutdown on Oct. 1 and a default in mid-October, but a resolution could see the FTSE 100 break above the recent range it has been trapped in - between around 6,400 and 6,650 - analysts say.
"I can't help think that we're likely to be fairly rangebound until we do at least get some sort of indication as to where the U.S. government negotiations are going," Keith Bowman, equity analyst at Hargreaves Lansdown, said.
"If we do come to a conclusion, I think the market could make a bit of progress."
Craig Erlam, analyst at Alpari, reckoned that once 6,650 is broken, which he expects by the end of October, 6,700 will be the next target, followed by 6,790 and 6,875.
In spite of the current U.S. fiscal tensions, investors remain optimistic on the outlook for equities, according to the latest Halifax Share Dealing Market Tracker survey.
On average, more than a quarter of investors are planning to increase their holdings, with just over 5 percent saying they will shrink their exposure to certain sectors.
Energy and mining stocks generate the biggest level of likely activity, with over 38 percent of investors saying they plan to increase their holdings, and 7.5 percent saying they plan to decrease holdings in the sectors, the survey said.
Energy firms SSE and Centrica bucked the weak market trend on Friday, gaining ground in the aftermath of hefty falls seen in the last two sessions after the opposition Labour party talked of an energy price freeze.
The shares rose 1.8 percent and 1.3 percent, respectively.
"The downside pressure for both is substantial given the squeeze that they would face that could lead to EPS downgrades led by margin decreases," said Atif Latif, director at Guardian stockbrokers. (Reporting by Tricia Wright; Editing by Elaine Hardcastle)