* FTSE 100 down 1.7 percent

* Aberdeen leads emerging market sell-off

* Pearson (NYSE: PSO – news) hurt by downgrades after profit warning

By Tricia Wright

LONDON, Jan 24 (Reuters) – Britain’s top shares sank to 4-1/2 week lows on Friday, with stocks exposed to emerging markets suffering the biggest losses, knocked by a rout in Latin American currencies.

Aberdeen Asset Management (Other OTC: ABDNF – news) shed 8 percent, the FTSE 100’s top faller, while peer Ashmore was among the steepest FTSE midcap decliners, off 5 percent, suffering from their heavy exposure to emerging markets after Argentina’s central bank gave up its battle against the currency’s decline.

“Obviously the market is separating the wheat from the chaff – Aberdeen Asset Management has got huge emerging markets exposure,” Ed Woolfitt, head of trading at Galvan, said.

“I won’t be charging in right here, right now, but if we find support (around) these levels over the next day or two, this would be a good buying signal for the UK equity market.”

The FTSE 100 was down 111.60 points, or 1.7 percent, at 6,661.68 points by 1543 GMT, trading at its lowest level since Dec. 23 and on course for its biggest one-day percentage drop this year. The index shed 0.8 percent on Thursday, hit by disappointing data from the United States and China.

Credit checking firm Experian (Other OTC: EXPGF – news) , brewer SABMiller (Berlin: BRW1.BE – news) and bank HSBC which, according to index provider MSCI (NYSE: MSCI – news) , feature among the European blue chips with the biggest exposure to Latin America, saw respective losses of 4.7 percent, 2.8 percent, and 2.1 percent.

It was a quiet day for corporate earnings. Pearson (Dusseldorf: PES.DU – news) dropped 1.8 percent, extending the previous session’s falls, as analysts cut their target prices for the publisher following Thursday’s profit warning.

Despite this, and warnings from other firms including oil major Shell (LSE: RDSB.L – news) as the European reporting season gradually gets under way, some investors take the view that the earnings will justify high valuations after a strong 2013.

“We do think that the earnings will come through … (Valuations are) only lofty compared to the last five years which could be the worst in most people’s careers,” said Peter Sullivan, head of European equity strategy at HSBC.

“We’re expecting double-digit earnings growth this year and next. How can we see that when the UK economy is only just emerging from recession? I think the key is that momentum of economic growth is positive across the world.”

The FTSE 100 currently trades at 13 times 12-month forward earnings – the highest since late 2009 and far above the 5-year average of 10.8 times, Thomson Reuters Datastream shows.