* FTSEurofirst 300 index falls after 9 days of gains
* Banks, commodities among top decliners; UK budget eyed
* Euphoria over China currency move disappears
* For up-to-the-minute market news, click on [
]By Atul Prakash
LONDON, June 22 (Reuters) - European shares drifted lower on Tuesday after strong gains over the past nine sessions, with euphoria over China's currency move dissipated and with equity investors taking profits from seven-week highs.
At 0805 GMT, the FTSEurofirst 300 <
> index of top European shares was down 0.4 percent at 1,051.68 points after hitting its highest closing since early May on Monday following an announcement by China's central bank over the weekend that it would allow more flexibility for the currency."It was good for one day, but now we are back to business. The market is going to focus again on macro-economic numbers," said Koen De Leus, economist at KBC Securities.
"People gave much more weight to the currency move than it deserved. Of course trade fictions have been avoided for the moment, but there are still some people in the U.S. who are not very pleased with China."
Big Chinese state-owned banks kept the yuan in check, a day after its biggest rise since the currency was revalued in 2005, indicating Beijing will allow its currency to appreciate at a far slower pace than demanded by its critics in the West.
Financial stocks were among the top losers, with STOXX Europe 600 banking index <.SX7P> falling 0.8 percent. Barclays <BARC.L>, BNP Paribas <BNPP.PA> and Societe Generale <SOGN.PA> fell 2 to 3.7 percent.
Commodity stocks, which spiked in the previous session on expectations that demand for industrial metals and oils will rise in China following the currency move, lost ground.
Miners BHP Billiton <BLT.L>, Antofagasta <ANTO.L> and ENRC <ENRC.L> fell 1.5 to 2.5 percent, while oil companies BP <BP.L>, BG Group <BG.L> and StatoilHydro <STL.OL> shed 0.7 to 2.1 percent.
BRITISH BUDGET EYED
Investors were also cautious ahead of Britain's budget later in the day. Finance Minister George Osborne was expected to announce big spending cuts and tax rises in what will be the tightest budget in a generation and the first big test for the new coalition government. [
]Many economists are concerned that tightening policy too fast right now could plunge Britain back into recession. U.S. President Barack Obama called on his fellow G20 leaders last week not to repeat the mistakes of the 1930s. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic on British economy, click here: http://r.reuters.com/zud73k ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Charts suggested the FTSEurofirst 300 index could struggle around 1,048 points, its 61.8 percent Fibonacci retracement of the fall from mid-April to late May. Last week, the index rose to hover above its 200-day moving average, now at 1,027 points, but a fall below the average could trigger more sell-off.
Among individual companies, British Airways <BAY.L> said it had agreed a recovery plan for its 3.7 billion pound ($5.5 billion) pension deficit, potentially removing a final obstacle to its planned merger with Spain's Iberia <IBLA.MC>. British Airways was up 0.3 percent, while Iberia gained 0.4 percent.
Across Europe, the FTSE 100 <
>, Germany's DAX < > and France's CAC 40 < > fell 0.1 to 0.5 percent. The Thomson Reuters Peripheral Eurozone Countries Index <.TRXFLDPIPU> fell 0.3 percent. (Editing by Hans Peters)