UPDATE 3-Britain's FTSE 100 edges lower as Fed taper talk mounts
* FTSE 100 index finishes 0.2 percent lower
* Concerns of cut in Fed stimulus hurt sentiment
* EasyJet gains on positive Goldman Sachs note
By Atul Prakash
LONDON, Dec 11 (Reuters) - Britain's top share index ended slightly lower on Wednesday with a provisional budget deal in Washington raising concerns of a reduction in U.S. stimulus as early as next week.
The agreement, reached late on Tuesday, would end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown.
"In the wake of the apparent budget deal, the market thinks that, at the margin, this adds to the possibility of a mild taper next week," said Jeremy Batstone-Carr, head of private client research at Charles Stanley, referring to the Federal Reserve easing back on bond buying.
Defensive stocks such as BT Group, United Utilities and British American Tobacco outperformed the wider market by rising 0.2 to 1.1 percent.
However, cyclical stocks such as banks and insurers fell, dragging down the blue-chip FTSE 100 index, which ended 0.2 percent lower at 6,507.72 points.
Charts showed the index traded near a point technical analysts believe could determine its near-term direction. It hovered near 6,513 points, its longer-term trend line that started from June lows, and its 200-day moving average.
Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, saw this as a support area that could form a floor for a new rally.
"And if it breaks, then we should see a continuation of the weakness towards the horizontal support of 6,330, a low in October. In the near term, the bias is more on the downside."
Among individual movers, budget airline company easyJet rose 2.8 percent to the top of the FTSE 100 list. Traders cited a note from Goldman Sachs upgrading the stock to "buy" from "neutral" and adding the company to its "conviction list".
Aerospace and defence group BAE Systems rose 2.6 percent to feature near the top of the FTSE 100, with traders attributing the advance to greater visibility on U.S. military spending after the budget deal in Washington.
Part-nationalised Royal Bank of Scotland was among the worst-performing FTSE 100 stocks as it fell 2.9 percent after its finance director Nathan Bostock resigned to join rival Santander.