* Investors jittery ahead of long weekend
By Toni Vorobyova
LONDON, May 24 (Reuters) - Britain's leading shares steadied on Friday after their steepest fall in a year in the previous session, with central bankers offering some reassurance that stimulus will stay for a while yet.
The FTSE 100 index was flat at 6,695.00 by 0749 GMT after slumping 2.1 percent on Thursday on concerns that U.S. Federal Reserve may soon start to unwind some of the stimulus that has helped global equity markets rally over the past year.
But St. Louis Fed President James Bullard cautioned on Friday that inflation would have to pick up before he voted to scale down bund purchases, while the Bank of Japan reaffirmed its commitment to stimulus to support the economy.
"I think this (Thursday's equity losses) will galvanise them to reconsider an early exit of bond buying," said Jordan Hiscott, trader at Gekko Global Markets, recommending that investors use the dip to put on fresh bets.
"I would see a continuing upward trend."
Any gains on the FTSE on Friday could be capped by some investors' reluctance to hold open bets over a three-day weekend in Britain and the United States, traders said.
Given the FTSE 100 scaled 13-year peaks earlier this week, investors focused on companies that look cheap relative to history and offer solid earnings prospects.
Smiths Group (LSE: SMIN.L - news) was one of the top gainers, up 0.9 percent after the engineering company reported underlying revenue growth across all divisions over the past nine months and confirmed full year guidance.
Smiths trades at 14.4 times earnings compared to its 10-year average of 15.9 times, according to Thomson Reuters Datastream.
On the flip side, Next - which trades at 15.8 times earnings versus its historic average of 12.2 times - was the biggest faller after Morgan Stanley downgraded the clothes and furniture retailer to 'underweight' from 'equal weight'.
"We may be calling the top too early, but cannot justify the valuation here," the analysts said in a note. (Editing by John Stonestreet)