* FTSE 100 down 0.5 percent
* Miners, oils, manufacturers hit by growth concerns
* Technical outlook darkens as index eyes bottom of range
By Toni Vorobyova
LONDON, March 6 (Reuters) - Britain’s FTSE 100 extended its losing streak into a third session on Tuesday, as concern about the health of the global economy hit heavyweight oils and miners, pushing the index towards the bottom of its recent range and darkening the technical outlook.
After a strong start to the year which saw UK-listed miners add 8.5 percent, analysts are starting to question whether much higher share prices are justified given the prospects of higher costs and an uncertain outlook for the underlying commodities.
China’s drive to slow down its economy threatens demand for the natural resources that are the lifeblood of UK-listed mining and energy giants, and raises concern that the Asian economy could be heading for a hard landing.
By 0848 GMT, the FTSE 100 was down 28.44 points, or 0.5 percent, at 5,846.39, after hitting its lowest level since Feb. 16 at 5,838.94 in early trade.
The weight of global concerns on the blue-chip index was underlined by its underperformance against the more domestic- focused small-cap equivalent, which traded flat.
“There is a general feeling of a lack of commitment at these levels after what has been quite a positive first quarter. Chinese growth is starting to spook the market and there are questions over the euro zone and Greece,” Dwight Burden, institutional salesman at Merchant Securities, said.
“From what we are hearing it’s very much a stock pickers’ market, clients looking at higher-quality cyclical plays rather than this dash for trash that we saw at the start of the year.”
Implied volatility on the FTSE, seen as a barometer of investor risk aversion, rose 3.4 percent to one-week highs.
Russian precious metals miner Polymetal topped the loser board with a 5.6 percent drop after UBS downgraded the stock to ‘neutral’, saying “growth is largely priced in”, while costs are likely to rise.
“Without catalysts such as a strong gold/silver price or expansion in reserves base, the stock is unlikely to outperform the sector in the short term,” UBS said.
Kazakhmys fell 1.8 percent. Essar Energy and Cain Energy - both seen as likely candidates to leave the FTSE 100 in this week’s reshuffle - were each down around 1.7 percent.
Pumps manufacturer Weir, which supplies oil services firms and relies on global economic health for its profits, fell 2 percent.
The sell-off has pushed the FTSE 100 towards the bottom of the 5,829 to 5,964 range in which it has been trapped since early February, darkening the technical outlook on the index.
After closing below the 10-day moving average on Friday and dipping under the 20-day mark on Monday, the index slipped through the 30-day line - which had served as the floor of the previous session’s fall - around 5,864 on Tuesday.
Simon Smollett, technical analyst at Credit Agricole CIB, said the blue-chip equities index is still looking attractive relative to gilts or corporate bonds, but noted that there are “signs of unconfirmed bearish divergence”.
“If the FTSE closed below 5,829, then I might be looking for a much deeper correction, may be to 5,718,” he said.