British manufacturers and heavyweight mining stocks were bruised by concerns over slowing growth in China on Monday, dragging down the broader index and raising the prospect it could slip below its recent tight range.

China cut its official growth target for 2012 to an eight-year low of 7.5 percent. Although that was broadly in line with expectations, it reinforced the spectre of potentially weaker demand for resources from the Asian powerhouse, sending global metals prices lower.

News that the euro zone's private sector shrank last month, while Britain's dominant services industry expanded less than forecast, added to the economic gloom.

Financials, the second biggest sector on the London bourse after basic resources, also suffered from nervousness over the fate of the Greek bailout, with a critical bond-swap deal with private bond holders needed this week.

The FTSE 100 was down 32.03 points, or 0.5 percent, at 5,889.36 by 1200 GMT, outperforming a 0.9 percent drop on the pan-European FTSE Eurofirst 300.

We are clearly looking at lower growth in Europe and China, as predicted, problems in Greece again, said Steve Larkins, head of sales and trading at Seymour Pierce. The fundies (fund managers) are more than happy to sit on their hands rather than expose themselves further.

Outflows from UK equity funds hit a 28-week high of over $400 billion last week, according to EPFR data.

Implied volatility on the benchmark London index rose 2.9 percent on the day but remained at less than half the multi-year peaks set in September 2011.

Auto and plane parts maker GKN, which was looking to China as a key driver of demand for premium cars this year, fell 2.7 percent.

BUYING INTO WEAKNESS

The FTSE 350 mining index fell 1.8 percent. Rio Tinto, the world's third largest miner, which last week forecast that growth in China would remain above 8 percent this year, fell 2.8 percent, taking 5.5 points of the FTSE 100.

We believe that the market is being overly myopic and are happy to buy into weakness, said James Follows, head of equities at Vestra Wealth, which manages around 2.7 billion pounds ($4.3 billion) in assets.

This is a structural growth story, and with this nation of 1.3 billion people looking capable of doubling its consumption of goods and services over the next decade, commodities such as iron ore and copper should continue to benefit.

The sell-off has nudged the FTSE 100 towards the bottom of the fairly tight range of 5,829 to 5,964 it has been trapped in since early February.

Until we see a confirmed breakout, range should persist, though we note that we're seeing bearish divergence in the short-term indicators, and we'd favour a downside breakout, analysts at Sucden Financial said in a note, adding that any such correction could take the FTSE down 2 percent to 5,760.

After closing below the 10-day moving average on Friday, the FTSE-100 dipped below the 20-day line around 5,905 on Monday, seen by technical analysts as a mildly bearish signal.

The index is now less than 30 points away from the 5,851 mark that chartists at Day By Day see as the lower boundary of its current neutral position.

One saving grace for the British bourse was a 1.5 percent rise in BP shares, the fifth biggest stock on the FTSE, after the oil giant reached an estimated $7.8 billion settlement with businesses and individuals affected by the Gulf of Mexico oil spill.