Wires

UK shares fall as data fans earnings concerns

* FTSE 100 falls 0.5 percent in second day of losses

* Economic growth concerns weigh ahead of earnings season

* Technical charts still open to further gains

By Toni Vorobyova

LONDON, Oct 9 (Reuters) - UK shares fell for a secondsession on Tuesday, dented by a wary view of Europe's debttroubles and concerns that gloomy global economic data bodes illfor the upcoming corporate earnings season.

UK data showed manufacturing output shrank more thanexpected in August and exports fell steeply, pointing todeterioration both in the domestic and the global economy.

The International Monetary Fund forecast that the UK economywould contract 0.4 percent this year versus growth of 0.2percent expected in July, and combined this with a more downbeatview on global growth.

That backdrop exacerbated concerns about the third quarterearnings season, which kicks off with U.S. aluminium giant Alcoa

after the market close, along with fast food restaurantoperator Yum Brands .

"People are getting cautious about the earnings season. I amquite bearish," said Nick Xanders, who heads European equitystrategy at broker BTIG.

"Tonight is going to tell you exactly which way we are going... Alcoa will tell you what's going in terms of UK miners. Yumwill be very interesting to see in terms of Chinese growth."

The FTSE 100 closed down 31.49 points, or 0.5 percent, at5,810.25 points , adding to a 0.5 percent drop theprevious session.

Concerns about the euro zone remained in the spotlight, withSpanish bond yields edging higher as the country continued todrag its feet over a formal bailout request needed to kick-starta European Central Bank plan to ease the crisis throughsovereign bond purchases.

After jumping some 700 points between early June andmid-September, the UK benchmark has stalled, trading in arelatively narrow 200 point range over the past month as therisks associated with the euro zone, economic growth andearnings make investors reluctant to push it higher.

On individual stocks, analysts are starting to reconsiderwhether companies still look attractive after the summer rally,prompting a downgrade on Aggreko by HSBC and on Sage

by Bank of America Merrill Lynch.

"At current levels, the risk reward (on Sage) is even, inour view, with this potential upside balanced by risks from aweaker macro in Europe, particularly in Spain and long-termthreats from on-demand solution vendors," Merrill analystswrote, downgrading the software firm to 'neutral' from 'buy'.

Investors wishing to more broadly protect their profitscould do so via options, taking advantage of relatively cheappricing, with UBS recommending a put-spread structure.

From a technical point of view, the market is not yetlooking negative, with the 50-day moving average serving as afloor on Tuesday.

"Given we came off the trend line off the highs inSeptember, the price action so far is a little bitdisappointing. That said ... above 5,800, I'd be tempted to giveit the benefit of the doubt," said Phil Roberts, technicalstrategist at Barclays.

(Additional reporting by Alistair Smout; Editing by JohnStonestreet)

((antonina.vorobyova@thomsonreuters.com)(+44 207 5429828)(Reuters Messaging: antonina.vorobyova@thomsonreuters.com))

Keywords: MARKETS BRITAIN STOCKS/MIDDAY