* FTSE 100 index falls 0.7 percent
* Concerns about growth, Q3 earnings hit sentiment
* Growth-linked sectors suffer; banks, miners slide
* Technical factors suggest room for a bounceback
By Atul Prakash
LONDON, Oct 8 (Reuters) - Britain's top share index fell onMonday as concerns about the looming third quarter earningsseason and the global economic outlook hurt growth-linkedsectors like banking and mining.
Analysts said the FTSE 100
, down 0.7 percent at5,828.88 by 1119 GMT. could fall 2-3 percent more in the nearterm, with sentiment dented by a cut in the World Bank's growthforecasts for the East Asia and Pacific region.
But a likely aid request from Spain and hoped-for clarity onU.S. spending cuts and tax rises could improve the mood, andtechnical factors suggested the market could thereafter bounceback.
The World Bank also said there was a risk the slowdown inthe world's biggest metals consumer China could worsen,triggering a sharp sell-off in UK mining stocks
The mining index fell 1.4 percent.
"The World Bank's downgrade is another indication of thevarious concerns ... which are likely to be reflected in theearnings results," Mike Lenhoff, chief strategist at BrewinDolphin, said.
The market was vulnerable to profit taking and could give upanother 100-150 points before recovering, he said.
Analysts said earnings estimates had been cut over recentweeks, led by energy and materials firms and economicallysensitive sectors such as financials.
The UK banking indexwas down 1.4 percent,pressured by Standard Chartered, BarclaysandRoyal Bank of Scotland, down 1.9 to 2.3 percent ahead ofthe results season that starts with U.S. aluminium firm Alcoa
According to Thomson Reuters data, earnings for the U.S. S&P500
companies are forecast to have fallen 2.4 percentfrom a year earlier, the first drop in three years. The earningsseason in Europe will pick up in the second half of October.
, which makes products for the globalsteel industry, and recruiter Michael Page
on Mondaybecame the latest UK firms to issue profit warnings. Cooksonfell 13.7 percent while Michael Page shed 1.3 percent.
fell 1 percent after its largestshareholder issued a long list of objections to the group'sproposed $45 billion merger with EADS
Charts showed that the FTSE 100 index's medium-term outlookremained good. The index is up 4.6 percent so far this year andhas advanced more than 11 percent since hitting a low in June.
"I remain relatively positive as the four-and-a-half-monthuptrend is still intact," Dominic Hawker, technical analyst atWesthouse Securities, said.
He said that it was encouraging that the index still tradedabove its uptrend line, now at around 5,750 and which couldprove to offer strong support. The index faced a toughresistance at around 6,000 points, its 2012 high.
Analysts said UK equities had become expensive followingrecent price moves, but were still relatively attractive.
According to Thomson Reuters Datastream, the FTSE 100 indextraded at 10.7 times its one-year forward earnings, up from 6.6times in October 2008 but below its 10-year average of 11.5.
"Stocks are not dirt cheap, but valuations are still OK andwouldn't be an issue when it comes to investing," Lenhoff said.
(Editing by John Stonestreet)
For related prices, Reuters users may click on - *
UK stock reportFTSE index:techMARK 100 index:FTSE futures:Gilt futures:Smallcap index:FTSE 250 index:FTSE 350 index:Market digest:Top 10 by vol:Top price gainers:Top % gainers:Top price losers:Top % losers:
* For related news, click on - *
UK hot stocks:Wall Street:Gilts report:Euro bond report
Pan European stock report:
Tokyo stocks:HK stocks:Sterling report:Dollar report:
* For company prices, click on - *
Company directory:By sector:
* For pan-European market data, click on - *
European Equities speed guide................
FTSE Eurotop 300 index...........................
DJ STOXX index...................................
Top 10 STOXX sectors........................
Top 10 EUROSTOXX sectors...................
Top 10 Eurotop 300 sectors..................
Top 25 European pct gainers....................
Top 25 European pct losers.....................
Keywords: MARKETS BRITAIN STOCKS/