* FTSE 100 down 0.4 pct
* Holding above 6,500 seen key to retain upside bias
* BG drags on output warning
* Syria, Fed uncertainty keeps broad market volume subdued
By Toni Vorobyova
LONDON, Sept 9 Britain's top share index retreated from three-week highs on Monday, with a warning of lower output from energy major BG and simmering concerns about Syria outweighing strong Chinese data.
BG dropped 4.7 percent to head for its biggest one-day fall in nearly a year after saying delays at projects in Egypt and Norway would reduce its 2014 production by around 30,000 barrels of oil equivalent per day.
Although the issues were seen as largely specific to BG, the company's size - as one of the 10 biggest weights in the FTSE 100 - mean its shares alone took some 8 points off the index.
Broad sentiment was also hurt by the prospects of U.S. intervention in Syria, with Senate voting on the issue possible as soon as Wednesday.
The FTSE 100 was down 24.94 points, or 0.4 percent, at 6,522.39 points by 1026 GMT, retreating from Friday's three-week highs but finding some technical support around the 30- and 50-day moving averages to cap the losses.
"We've seen a sell off and it's starting to test down towards 6,500 so it seems that some of that better than expected Chinese data has been clouded by Syria," said Brenda Kelly, analyst at IG Markets.
"As long as we can stay above 6,500 level the bias is still to the upside for the market. Looking at individual companies, there is a mixed bag ... BG cut its production outlook for the third time in a year and clearly investors do not like the sound of that."
Analysts at Liberum called BG's 2014 and 2015 guidance "disappointing", but concluded that the long-term growth profile for the company justified valuations which at first glance may appear "relatively expensive".
On the flip side, Burberry was a top gainer, up 2.1 percent thanks to a price target upgrade from HSBC and to strong data from key market China, where trade figures offered fresh signs of economic stabilisation.
Aside from the top risers and fallers, volumes on the market were limited, with activity on the FTSE 100 at only around a quarter of the 90-day daily average going into mid-session.
Alongside waiting for developments in Syria, some investors were also staying out of the market to wait for more clarity on whether the U.S. Federal Reserve will scale back its stimulus programme as soon as this month and, if so, by how much.
"After Friday's slightly disappointing (U.S.) non-farm payroll numbers, it is still a waiting game as to the U.S. trimming their bond buying programme," Mark Ward, head of trading at Sanlam Securities said ahead of the next Federal Reserve meeting starting early next week. (Additional Reporting by David Brett; Editing by Toby Chopra)