* FTSE 100 down 0.1 percent
* Investors pocket gains in tech and luxury sectors
* Federal Reserve monetary support seen continuing
* FTSE 100 has further to go - Credit Suisse
By Alistair Smout
LONDON, May 22 Britain's FTSE 100 weakened early
on Wednesday after hitting 13-year highs the previous session,
as investors took profits in outperforming sectors such as
technology and luxury.
By 1020 GMT, London's blue chip index was down 8.10
points, or 0.1 percent, to 6,795.77, pulling back from 13-year
highs hit the previous day as equities climb amid loose monetary
policy that has driven down yields in other asset classes.
Tech stocks slid 3.5 percent, the biggest
sectoral fallers on the FTSE 100, with chip-maker ARM
the biggest loser on the index.
ARM dropped 4.2 percent after an investor day on Tuesday,
and as its recent strong run prompted Morgan Stanley to
recommend a "tactical short" on the stock, anticipating weakness
over the next 60 days.
The stock has climbed 32 percent so far this year, against a
rise on the index of 15.4 percent.
Burberry was also a top FTSE 100 faller, down 3.1
percent as traders cited profit-taking following strong results
out on Tuesday.
The FTSE was little changed after Bank of England minutes
showing policymakers remained divided over restarting bond
purchases in May, and after data reflecting high public sector
net borrowing and lower-than-forecast April retail sales.
The main macroeconomic focus for the market on Wednesday
will be Federal Reserve Chairman Ben Bernanke's testimony to
Congress later in the session. The minutes of the Federal Open
Market Committee's April 30-May 1 policy meeting will also be
released at 1800 GMT.
Two senior Fed officials played down the chances of the
central bank signaling a readiness to trim its bond buying
programme after a week where talk of the "tapering" of the
programme had picked up.
"Last week I would have said that there was a risk that
Bernanke was going to start talking about tapering, but we've
had quite a lot of rhetoric from Fed officials in the last few
days saying that QE is more likely to carry on than not," said
Gerard Lane, equity strategist at Shore Capital.
"I think the tapering anxieties of last week have died a
Despite the index's current pause and near record high,
Credit Suisse remains "overweight" in UK equities and
anticipates that the FTSE 100 will top 7,000.
"We stay overweight the UK as 85 percent of sectors trade
below their global peer group (and) rising inflation
expectations should lead to a re-rating of equities," analysts
at Credit Suisse said in a note.
(Editing by Hugh Lawson)