Europe shares set for biggest weekly loss in 2-1/2 years

* FTSEurofirst 300 down 1.6 pct, bringing weekly loss to 4.9

pct

* $300 bln wiped off oil companies' market value since June

* Pictet bearish on euro zone stocks for 2015

By Blaise Robinson

PARIS, Dec (Shanghai: 600875.SS - news) 12 (Reuters) - European stocks tumbled again on

Friday, leaving them on course for their biggest weekly loss

since May 2012 as shares in oil and oil services firms sank

further along with crude oil prices.

The STOXX oil and gas index has plummeted 29 percent

since June. The sell-off has wiped roughly $300 billion off

market capitalisation of the sector, nearly the size of

Denmark's annual GDP.

Saipem (Other OTC: SAPMY - news) dropped 4.2 percent on Friday, hitting a

10-year low, while Royal Dutch Shell (Xetra: R6C1.DE - news) was down 2.4

percent, Repsol down 2 percent and CGG (NYSE: CGG - news) down

6.2 percent.

Brent crude fell below $63 a barrel, its lowest

since July 2009, as concerns over a global supply glut and a

sluggish demand outlook persisted.

Crude has dropped more than 45 percent since June, forcing a

number of European oil services companies including Seadrill

and Fugro (Xetra: A0ET3V - news) to scrap dividends as oil majors

accelerate cost-cutting efforts.

"We're reaching a point where there's a risk of seeing

corporate and sovereign defaults in energy-producing countries,

which could revive global systemic risks," said Christophe

Donay, head of strategy at Pictet, which has $441 billion in

assets under management and custody.

"I wouldn't be surprised to see the IMF helping some of the

oil-producing countries next year... The key for asset managers

for 2015 is really to diversify and hedge portfolios."

Pictet has recently sold all euro zone stocks in its

portfolios amid doubts about the European Central Bank's ability

to revive the region's economic growth, Donay said.

At 1300 GMT, the FTSEurofirst 300 index of top

European shares was down 1.6 percent at 1,335.57 points. The

index has dropped 4.9 percent so far this week.

It is up 1.5 percent in 2014, well below the 10 percent gain

by Wall Street's S&P 500.

Around Europe, Britain's FTSE 100 index was down 1.5

percent, Germany's DAX index down 1.2 percent, and

France's CAC 40 down 1.6 percent.

Shares (Berlin: DI6.BE - news) in Danish brewer Carlsberg (Other OTC: CABGY - news) also featured

among the biggest losers, down 4.3 percent as the Russian rouble

weakened again. Russia accounts for about a third of Carlsberg's

sales.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up

(Additional reporting by Annabella Nielsen; editing by John

Stonestreet)