* UK energy shares fall for 3rd straight session
* Poor results, oil demand concerns weigh on sector
* FTSE 100 index falls 0.4 pct, hits 3-1/2-month low
* ARM Holdings falls 4.6 pct after results
By Atul Prakash
LONDON, Feb 4 Shares in London-listed energy
companies fell further and touched their lowest in more than
three months on Tuesday following some poor company results and
on growing concerns about global demand for raw materials.
The UK oil and gas index fell for a third
straight session and dropped as much as 0.8 percent to its
lowest since mid-October, with oil major BP falling 1.5 percent
after posting a 37 percent drop in fourth quarter profit.
The sector has face some selling pressure on signs of
slowing growth in the United States and China, the world's top
oil consumers. Latest data showing U.S. manufacturing activity
slowed sharply in January and disappointing factory activity
reports from China have prompted investors to trim their
exposure to riskier assets like equities.
Weaker energy stocks put pressure on the blue-chip FTSE 100
index, which fell for fifth straight session and was
down 0.4 percent at 6,424.86 points by 0908 GMT after falling to
an intra-day low of 6,416.72, the lowest since October.
"I am expecting a further pull-back of at least 3 percent
over the next two weeks before we start to find new support and
cash. We stay 'market neutral' over the next week of trade but
maintain a 'buy-the-dip' mentality," Mike Jarman, chief market
strategist at H2O Markets, said.
The FTSE 100 index has fallen more than 6 percent in two
weeks on concerns that a cut in U.S. economic stimulus could
result in a flight of capital from emerging markets (EM) and
hurt growth in those countries.
"Stock markets always overshoot, especially when it's hard
to know where the bottom of the latest EM-derived crisis might
be," Jeremy Batstone-Carr, head of private client research at
Charles Stanley, said.
"The Q4 European earnings season has been poor so far, but
at least it helps clear the decks for a better 2014."
In another poor earnings release, British chip designer ARM
Holdings fell 4.6 percent, the top FTSE 100 decliner,
after missing fourth-quarter expectations for royalty revenue
from the use of its processors in smartphones because of slower
growth in sales by Apple and Samsung.
However, chartists said the broader market had potential to
recover in the near-term.
"Even though the FTSE 100's long-term uptrend has been
broken, technicals may provide some downside protection,"
Julian McCormack, technical analyst at Brewin Dolphin, said.
"The index is back down to support at around 6,400 and the
relative strength indicator is now in 'oversold' territory,
suggesting the 6 percent correction is somewhat overdone and
downside from here is limited."