European shares fall to 2-month lows on China concerns

* FTSEurofirst make largest weekly drop since August

* Weak yuan, oil prices put pressure on market

* Old Mutual (Other OTC: ODMTY - news) drops on South Africa links (Adds closing prices)

By Sudip Kar-Gupta and Danilo Masoni

LONDON/MILAN, Dec 11 (Reuters) - European shares fell on Friday on concerns that weakness in the Chinese yuan could weigh on the global economy, while the slump in oil prices added to the gloomy mood before a widely expected rise in U.S (Other OTC: UBGXF - news) . interest rates next week.

The pan-European FTSEurofirst 300 index fell 2.14 percent to its lowest level in around two months, and made its weakest weekly perfomance since August. The euro zone's blue-chip Euro STOXX 50 index < .STOXX50E> declined 2.04 percent.

"We have the yuan at 4-1/2 year lows and that is causing unease in China and abroad. Last time the yuan fell like this, it caused a jolt for markets, and anyone exporting out to China, like the auto makers and luxury brands, will feel the pain from a weaker yuan," Jasper Lawler, market analyst at CMC (BSE: CMC6.BO - news) , said.

That could hurt export-oriented companies in sectors such as automotive, luxury goods and commodities, which were among the top decliners in Europe. Shares (Berlin: DI6.BE - news) of French carmaker Renault (Swiss: RNO.SW - news) , watchmaker Swatch, fashion house Hugo Boss (Xetra: BOSA.DE - news) and BHP Billiton (NYSE: BBL - news) were all down 3.3 to 5.3 percent.

The FTSEurofirst fell 4.1 percent this week and is also down 7.9 percent since the start of December, after the European Central Bank (ECB) disappointed some investors with only limited new economic stimulus measures this month.

"Markets continue to discount disappointment over the ECB. You add oil prices making new lows, worries over U.S. high yield, China deflation and a mini credit crisis in Italy, then you have the cocktail that is weighing on markets," said Giuseppe Sersale, fund manager at Anthilia in Milan.

The STOXX Europe 600 Oil & Gas Index fell 3.6 percent, with crude oil prices hitting fresh seven-year lows on Friday after the International Energy Agency (IEA) warned global oversupply could worsen in the new year.

Shares in companies exposed to South Africa, such as British financial groups Old Mutual and Investec (LSE: INVP.L - news) , also dropped as South African financial stocks slumped after the finance minister was sacked.

Dialog Semiconductor (Xetra: 927200 - news) 's shares fell as much as 11 percent, with traders citing negative comments on its outlook from Bankhaus Lampe. It (Other OTC: ITGL - news) ended down 1.7 percent.

In spite of the pullback on markets this month, the FTSEurofirst 300 index remains more than 2 percent higher since the start of 2015, helped in part by the ECB's policies which have supported a recovery in the euro zone economy.

Today's European research round-up (Editing by Richard Balmforth)