* FTSE 100 down 1.1 pct

* FTSE falls below 200-day simple moving average level

* Hargreaves Lansdown (LSE: HL.L – news) hit as MS cuts price target

* ARM and Sage suffer in wake of Nasdaq sell-off

By Tricia Wright

LONDON, April 11 (Reuters) – Technology stocks tumbled on Friday as Britain’s benchmark equity index fell alongside global markets, leaving it vulnerable to its biggest weekly loss in around a month.

Financial services and investment management group Hargreaves Lansdown topped the FTSE 100 fallers’ list, off 5.4 percent, with traders citing a price target cut on the stock from Morgan Stanley (Berlin: DWD.BE – news) .

The investment bank, which slashed its target price to 1,495 pence from 1,670 pence – albeit still above current levels of around 1,252 pence – said in a note that pressure on pricing and weaker net interest income will weigh on Hargreaves Lansdown’s earnings over the coming year.

The blue-chip FTSE 100 index, which climbed 14.4 percent in 2013 and rose to nearly its best level since early 2000 in January this year, was down by 74.65 points, or 1.1 percent, at 6,567.32 points by 1101 GMT.

Technology companies ARM and Sage were among the worst-performing stocks on the FTSE, suffering in the wake of a 3.1 percent slump overnight on the United States’ technology-dominated Nasdaq index.

ARM, whose chip designs feature in most smartphones, fell 4.5 percent to 958.5 pence in relatively brisk trading volume, while software developer Sage declined 2.3 percent.

“I would leave ARM well alone for now. I’d be happy to see it drift down to 930 or 910 pence before phasing back into the stock,” said Beaufort Securities sales trader Basil Petrides.

The FTSE is down by almost 3 percent this year, having retreated from a peak of 6,867.42 hit in late January.

Frothy valuations are curbing investor interest in putting more money to work in equities. The FTSE 100 trades on a 12-month forward price/earnings ratio of 13.2 times, against its five-year average of 11 times, Thomson Reuters Datastream shows.

Also acting as a deterrent, analysts have been steadily lowering profit forecasts for UK companies since the start of 2014, data from Thomson Reuters Datastream shows, a signal of potential tough times ahead for Britain’s top equity index.

“We do think the markets are vulnerable here,” Ian Richards, global head of equities strategy at Exane BNP Paribas, said.

“From a micro perspective we’re on valuations above normalised levels (and) there’s an earnings backdrop which is characterised by downgrades,” he said.

Revised earnings per share estimates for UK companies over a rolling three-month period have worsened since late January. The average estimate has fallen 7 percent in the past three months, compared with a 3.2 percent drop in the three months to late January, according to Datastream.

Analysts said the revisions reflected many FTSE 100 companies’ big exposure to problems in emerging markets, while the relative strength of sterling against the euro was also impacting UK corporate profits.

The index’s fall on Friday also pushed the FTSE below its 200-day moving average level, which is often interpreted by technical traders as a sign of further weakness to come in the near term.

Adrian Slack, technical strategist at London-based firm APS Alpha, said the FTSE could fall to the 6,393 point level if it broke below 6,540, which roughly marked the start of a slight rebound for the FTSE in late March.

“I’m not as bullish as I was before. It’s a ‘sit-on-your-hands’ type moment for the market at present, and I think we may tread water for a bit,” he said. (Additional reporting by Sudip Kar-Gupta and Blaise Robinson; Editing by John Stonestreet)