* FTSEurofirst 300 down 1.5 pct; down for fourth session
* Greece concerns, Wall St plunge trigger sell-off
* Energy stocks down on weaker crude, pharma shares slide
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, May 7 (Reuters) - European shares plunged to a
three-month low in early trade on Friday following hefty
sell-offs on Wall Street, with mounting concerns about a severe
debt crisis in the euro zone forcing investors to dump equities.
The FTSEurofirst 300 <> index of top European shares
pared early losses but was still down 1.5 percent at 991.24
points at 0835 GMT after falling to 978.49 -- the lowest since
early February.
The index, which closed 1.6 percent lower in the previous
session, has fallen about 12 percent in three weeks, but is up
52 percent since hitting a record low in March last year.
Investors sold energy shares as crude oil <CLc1> hovered
around $77 a barrel after falling sharply in the previous
session on concerns about Greece and bearish global growth
prospects.
BP <BP.L>, BG Group <BG.L>, Tullow Oil <TLW.L>, Repsol
<REP.MC>, Total <TOTF.PA> and StatoilHydro <STL.OL> shed 1 to
2.5 percent.
"It is clear that the euro zone is in a very difficult
situation and there is no quick fix," said Tammo Greetfeld,
equity strategist at UniCredit.
"It looks like that foreign investors, particularly U.S.
investors, yesterday for the first time significantly
acknowledged that there are some risks emanating from the euro
zone that could be severe."
U.S. stocks sank 9 percent in the last two hours of trading
on Thursday, before clawing back some of the losses, as a
suspected trading glitch and fears of a new credit crunch in
Europe threw markets into disarray. U.S. stock index futures
<SPc1> <DJc1> <NDc1> rose, signalling a recovery on Wall Street
on Friday.
Shock waves from the relatively small Greek economy
reverberated around the world, as investors worried about the
chances of other European governments facing a similar debt
crisis. Group of Seven finance ministers said they would discuss
the Greek bailout later on Friday. []
Euro zone leaders also meet later in the day in a special
summit, while Germany's parliament is to vote on the 110 billion
euro bailout ($140 billion) later in the day.
BANKS TURN POSITIVE
The STOXX Europe 600 banking index <.SX7P> turned positive
and was up 0.3 percent after HSBC <HSBA.L> said its financial
performance in the first quarter of 2010 was very good and well
ahead of the first quarter of 2009.
HSBC shares extended gains and were up 4.3 percent.
Several other banks also pared early losses, but stayed in
negative territory. Barclays <BARC.L>, Lloyds <LLOY.L>, Societe
Generale <SOGN.PA>, National Bank of Greece <NBGr.AT> and EFG
Eurobank <EFGr.AT> falling 0.6 to 3.2 percent.
Royal Bank of Scotland <RBS.L> was down 0.7 percent despite
beating expectations with a return to profit in the first
quarter.
European investment-grade corporate credit default swaps hit
their widest levels in just over a year, while the premium
investors demand to buy peripheral euro zone government bonds
rather than benchmark Bunds rose as contagion fears from
Greece's debt crisis refused to abate.
Britain's FTSE 100 index <> was down 0.3 percent and
sterling sank to a one-year low against the dollar after
incoming results of a UK general election suggested the country
was heading towards a hung parliament.
Drugmakers, generally seen as defensive plays, were also
hurt following bearish market sentiment. AstraZeneca <AZN.L>,
GlaxoSmithKline <GSK.L>, Merck <MRCG.DE>, Novartis <NOVN.VX>,
Novo Nordisk <NOVOb.CO>, Roche Holding <ROG.VX>, Sanofi-Aventis
<SASY.PA> and Shire <SHP.L> fell 0.2 to 1.9 percent.
Investors awaited April's U.S. non-farm payrolls data, with
economists polled by Reuters expecting the numbers to show that
employers added 200,000 jobs in April after a 162,000 increase
in the previous month. []
(Editing by Jon Loades-Carter)
