* FTSE 100 down 0.7 percent
* Index turns sharply negative after U.S. data
* Lloyds falls; delays dividend prospect after charge
By Alistair Smout
LONDON, Feb 3 (Reuters) - Britain's top shares extended a recent slide on Monday, slipping firmly into negative territory after disappointing U.S. data, with Lloyds leading banks lower after its latest update.
The FTSE 100 was down 44.78 points at 6,465.66 by the close, a fall of 0.7 percent, dropping to new six-week lows after last week's 2.3 percent decline.
The index turned negative after a sharp miss on the U.S. ISM manufacturing data raised doubts over the strength of the U.S. economic recovery, ahead of jobs data later in the week.
"There's been a shift in sentiment in the market, and there's no doubt that people are a lot more wary of figures coming out. After a big miss like that, the FTSE hasn't responded well," Toby Morris, sales trader at CMC Markets, said.
The index dropped heading into the close in a technically bearish move, falling below 6,470, seen by technical analyst Philippe Delabarre at Trading Central as a key support level if the index was to stay in its uptrend since the summer.
Over the last fortnight, the index has lost 5.3 percent on concerns over emerging markets.
Unease about slowing Chinese growth and the withdrawal of U.S. monetary stimulus spread from emerging market currencies to the world's big stock markets, resulting in a 3.5 percent drop for the FTSE in January, its biggest monthly decline since last June and its worst January since 2010.
"The FTSE has seen some weakness over the last few trading sessions led by the selling in (emerging markets)... We continue to see the FTSE at the lower end of the uptrend and see us close to the turning point for a move higher," Atif Latif, head of trading at Guardian stockbrokers, said.
Financials - a broad based sector which includes banks, asset managers and insurers - trimmed 21.5 points off the index, accounting for nearly half of the index's fall.
Lloyds fell 4 percent after it said it had set aside a further 1.8 billion pounds ($3 billion) in the fourth quarter to compensate customers mis-sold payment protection insurance (PPI), and dividend payouts were to come later than some in the market had anticipated.
"With people getting excited about a dividend coming soon, the fact it has been put back removes the reason to own those shares in the short-term," Zeg Choudhry, head of equities trading at Northland Capital, said.
Alongside the emerging market worries, investor concern has focused on the current earnings season, and whether it will result in profits strong enough to justify lofty valuations after a bumper 2013.
Of the 17 percent of European companies to have reported so far, 44 percent have missed profits expectations, while 46 percent have missed expectations on revenue, Thomson Reuters Starmine data shows.
However, Randgold gained strongly following its results, up 6.2 percent after posting record production in 2013.