* FTSEurofirst 300 falls after 6 mths high
* Financials slip; RBS sees market conditions challenging
* For up-to-the-minute market news, click on
By Atul Prakash
LONDON, Nov 5 (Reuters) - European shares drifted lower in early trade on Friday as investors took profits from six-month high equity prices ahead of widely-watched U.S. nonfarm payroll numbers, with financials featuring among top decliners.
Royal Bank of Scotland fell 2.2 percent as it expected challenging market conditions in the fourth quarter and said a UK bank tax would add up to 250 million pounds to its costs next year.
At 0949 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,104.52 points after rising to 1,111.02, the highest since mid-April. It surged 1.7 percent on Thursday on the U.S. Federal Reserve's decision to buy $600 billion in government bonds to help the U.S. economy.
Investors eagerly awaited the U.S. employment report for October, due at 1230 GMT, for near-term guidance.
"Expectations are for non-farm payroll numbers to come in around 60,000, the first increase since May. But, this is not likely to be enough to reduce the unemployment rate," said Manoj Ladwa, senior trader at ETX Capital.
"Unless the figure is strongly above expectations, the market could come in for a small bout of profit-taking as traders square their books going into the weekend."
Financials featured among the top losers, with the STOXX Europe 600 banking index down 1.3 percent. HSBC fell 2.1 percent as investors took profits after strong rally in recent sessions. The bank said on Friday its third quarter and year-to-date profits were "well ahead" of a year ago.
Credit Agricole, Bankininter and Bank of Ireland fell 2.4 to 4.9 percent.
Across Europe, the FTSE 100, Germany's DAX and France's CAC 40 fell 0.1 to 0.2 percent. The Thomson Reuters Peripheral Eurozone Countries Index was down 1.8 percent, while Irish shares fell 1.2 percent.
Ireland's Department of Finance declined to comment on a newspaper report saying the government would delay publication of its four-year fiscal plan until after a by-election for a vacant parliamentary seat on Nov. 25.
Meanwhile, some analysts said the Fed's further stimulus measures had set the ground for the stock market to go higher in the remaining months of the year.
"One has to feel a sense of reservation about what's going on, but you can't ignore momentum, which just seems to be one way at the moment," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"The bad news could be ignored in the short term. The view is that here is a central bank that is prepared once again to ensure that the economy does not relapse into recession."
Among individual movers, the world's largest cement maker Lafarge fell 2 percent after posting lower-than-expected third-quarter results due to rising production costs.
Mobile phone retailer Carphone Warehouse jumped 6.5 percent as it raised its earnings forecast and pledged to pay its first dividend, saying strong U.S. growth and demand for smartphones would offset extra investment in its UK megastores. (Graphics by Scott Barber; Editing by Hans Peters)