* FTSE 100 down 0.5 percent, touches two-week low
* Stronger dollar hits miners, energy stocks
* BATS weak on results, BA gains ground
By Simon Falush
LONDON, Oct 27 (Reuters) - Britain's FTSE 100 moved lower on Wednesday morning, led by mining and energy stocks hit by lower commodity prices amid dollar strength, and as doubts grew on the scale of money printing from the U.S. Federal Reserve.
By 0803 GMT the blue-chip index was 27.59 points, or 0.5 percent, lower at 5,679.71, having earlier touched its lowest in two weeks. It fell 0.8 percent on Tuesday to 5,707.30.
Miners were the biggest drag on the index as a firmer dollar hit metal prices, with copper falling over 1 percent.
Xstrata fell 2.4 percent after it revised terms on its A$428 million ($422 million) takeover offer for Australian group Sphere Minerals following a move by a Singaporean firm to acquire a blocking stake in the target.
The Wall Street Journal reported the Fed was likely to reveal a programme of U.S. Treasury bond purchases worth a few hundred billion dollars over several months.
That would be on a smaller scale and on a slower basis than many in the market have been expecting.
A Reuters survey earlier this month found U.S. primary dealers' projections for the size of the Fed's expected quantitative easing ranged from $500 billion to $1.5 trillion.
"It looks as if QE will be phased over 6-9 months and that is not what equity markets were expecting or priced for," Jeremy Batstone-Carr, head of equities at Charles Stanley said.
Energy firms were hit as crude fell on the weaker dollar. BP fell 0.7 percent and BG Group lost 1 percent.
Some analysts said further recovery in the dollar was likely, a factor which could keep the pressure on equities.
"The reversal in the dollar is taking some of the heat out of the equity market and if the dollar has altered course, it could lead to something quite significant," Batstone-Carr said.
Banks, sensitive to any move in appetite for risk, were also weaker. Standard Chartered lost 0.8 percent while Barclays fell 0.5 percent.
There was weakness across the board with some defensive stocks as well as cyclical companies under pressure.
British American Tobacco fell 1.9 percent after posting a bigger than expected 3 percent dip in underlying nine-month sales volumes and saying the recession's impact on smokers showed no sign of abating.
British Airways was the top riser on a meagre list of blue-chip gainers, adding 1.8 percent after Spanish carrier Iberia called a shareholder meeting for Nov. 29 to vote on its planned merger with the British airline.
With the index briefly slipping below support around 5,660, the next key areas that will be eyed are levels around 5,600 where the Oct. 8 and Oct. 12 lows sit, CMC Markets analyst Michael Hewson said.
GlaxoSmithKline and Whitbread went ex-dividend knocking 3.31 points off the FTSE 100 index. (Editing by Dan Lalor)