* FTSEurofirst 300 loses 2.2 pct on economic growth fears
* Index suffers 5.8 pct weekly fall, worst since March 2003
* Banks, energy and mining shares among top losers
By Atul Prakash
LONDON, Sept 5 (Reuters) - European shares ended sharply
lower on Friday, marking the biggest weekly decline in more than
five years, as weaker than expected U.S. non-farm jobs data
dampened sentiment and raised economic concerns.
A profit warning by the world's top mobile phone maker,
Nokia <NOK1V.HE>, saying it would lose market share this quarter
as it refused to participate in a price war waged by some rivals
to combat weak economies also weighed on the market. The company
shares fell nearly 10 percent.
The FTSEurofirst 300 <> index of top European shares
finished 2.24 percent lower at 1,125.48 points after losing 2.6
percent in the previous session. The pan-European index is down
25 percent so far this year.
Banks, miners and energy shares were among top-weighted
losers in the index, with commodity stocks also facing pressure
from a sharp decline in prices of metals and crude.
UBS AG <UBSN.VX> and Barclays <BARC.L> slipped 3.6 percent
percent each, Royal Bank of Scotland <RBS.L> dropped 3.5 percent
and HBOS <HBOS.L> lost 2.5 percent.
"You are looking at a weak economic scenario, the financial
liquidity crisis is not solved and you are looking at weak
earnings reports," said Philip Isherwood, strategist at Dresdner
Kleinwort.
We are looking at high volatility and weak, if not negative,
equity returns."
The U.S. unemployment rate unexpectedly shot up to 6.1
percent in August, the highest in nearly five years, as
employers cut payrolls for an eighth straight month and a
decline in labour markets accelerated.
Analysts said the bleak hiring data showed a weakening
economy that is likely to oblige the Federal Reserve to keep
interest rates low for an extended period. []
The European Central Bank had sparked the global equities
sell-off by cutting its growth forecasts for the region on
Thursday and unveiling tougher rules on the assets banks can
submit as collateral in central bank lending operations.
On Friday the gloom intensified. Data showed industrial
production in Germany fell 1.8 percent in July, a steeper than
expected drop, which heightened fears of recession in Europe's
largest economy and the world's top exporter.
"The ongoing economic downturn now poses a serious obstacle
for a recovery of the financial system," said Gertrud Traud,
chief economist at German bank Helaba.
Across Europe, London's FTSE 100 <> fell 2.3 percent,
Germany's DAX <> lost 2.4 percent and the CAC 40 <>
in Paris dropped 2.5 percent.
GROWTH FEARS HURT COMMODITIES
Miners also lost ground, tracking a sharp decline in metals
prices. Copper tumbled to a seven-month low as demand worries
and a hefty rise in inventories triggered a sell-off, while
aluminium fell to a seven-month and lead and tin fell 5 percent.
Kazakhmys <KAZ.L> dropped 8.2 percent, Antofagasta <ANTO.L>
shed 7 percent, Xstrata <XTA.L> slipped 5.6 percent and Anglo
American <AAL.L> fell 5.2 percent.
A 1.6 percent decline in crude prices <CLc1> pressured
energy stocks, with BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas
producer BG Group <BG.L> and Tullow Oil <TLW.L> falling between
0.6 and 3.4 percent.
French energy group EDF <EDF.PA> fell 2.4 percent. Industry
sources said the company was making progress in its takeover
talks with British Energy Plc <BGY.L>, but a key shareholder
said it was exploring a rival proposal from Centrica <CNA.L>.
[]
Ireland's Elan Corp <ELN.I> fell 1.7 percent. It is seeking
second-round bids for its drug delivery unit in an auction
likely to be won by a private equity buyer rather than a rival
drug firm, people familiar with the situation said.
HMV Group Plc <HMV.L> also fell, shedding 2.3 percent. The
company said underlying sales continued to grow during the
summer, albeit at a slower rate.
(Additional reporting by Peter Starck and Tyler Sitte in
Frankfurt and Joanne Frearson in London; Editing by Greg
Mahlich)
