By Tricia Wright

LONDON (Reuters) – FTSE edged lower on Tuesday, led by security group G4S after an analyst’s downgrade, while concern about corporate earnings took its toll on investor sentiment.

The mood was further darkened by the deteriorating situation in Ukraine.

G4S fell 2.8 percent in brisk trade. Traders blamed Deutsche Bank’s lowering its rating to “sell” from “hold” and cut its target price for the shares to 210 pence from 221 pence.

The investment bank acknowledged G4S’s efforts to overhaul itself following a series of damaging failures and cited its exposure to emerging markets as a strength. But it reckoned its valuation is looking full.

G4S trades at a premium to its peers. It is on a 12-month forward price/earnings ratio of 16.9 times, according to Thomson Reuters StarMine SmartEstimates, which focus on the up-to-date predictions of the historically most accurate analysts.

Smaller security firm Securitas, meanwhile, trades on 12.8 times, while outsourcing peers Serco and Capita are on 14.2 times and 16.2 times respectively.

The FTSE 100 was down 8.85 points, or 0.1 percent, at 6,574.91 points by 1106 GMT, recouping some of its recent losses on Monday with a 0.3 percent rise.

The index last week suffered its biggest weekly loss in a month, dropping 2 percent as Wall Street’s fears about over-stretched stock valuations, particularly in the technology sector, spread to Europe. With Intel and Yahoo set to report earnings on Tuesday, those concerns may resurface.

“(They) will feed into the fears about the tech sector, particularly if they miss expectations,” CMC Markets senior market analyst Michael Hewson said.

“I think markets going into the Easter break will be a little bit reluctant to get aggressively long stocks… We need (a significant beat on the earnings for this week) and a significant ratcheting down in tensions in the Ukraine, neither of which I expect.”

Russia declared on Tuesday that Ukraine was on the brink of civil war as Kiev said an “anti-terrorist operation” against pro-Moscow separatists was underway, though the crackdown appeared to get off to a slow start.

Underscoring the worries about earnings, brewer SABMiller fell 1.6 percent, one of the biggest declines in the FTSE 100. Disappointing full-year sales triggered profit-taking on a stock that trades at a premium to all its peers.

Charts signalled more falls, with analysts saying the FTSE 100 could move to around the bottom end of a range, between 6,400 to 6,800 points, it has been trapped in since October.

“It does feel a bit heavy with recent sell-offs being more intense than rallying periods. The key level is 6,500 and if this gives way then I would expect to see some more downside action towards 2014 lows (of 6,416),” technical analyst Fawad Razaqzada said.

(Editing by Larry King)