Spain's IBEX slips on LatAm concerns, drags down European shares

* Spain's IBEX down 2.8 pct on exposure to Latin America

* FTSEurofirst 300 falls 1.4 pct, heads for weekly loss

* Aberdeen Asset Management (Other OTC: ABDNF - news) , Mapfre (Xetra: CMAB.DE - news) fall 5 pct

* European volatility index hits 3 month high

By Atul Prakash

LONDON, Jan 24 (Reuters) - Spanish equities slipped on Friday and headed for their worst weekly show in a year, with a rout in Latin American currencies promoting investors to trim their bets on the country that is heavily exposed to the region.

Spanish insurer Mapfre and London-listed Aberdeen Asset Management, which have heavy presence in emerging markets, fell about 5 percent after Argentina's central bank abandoned its policy of supporting the local currency by intervening in the foreign exchange market.

"We are seeing widening deficits in the whole of Latin America and Spain is much more exposed to that than any other European country," said James Butterfill, global equity strategist at Coutts, adding Spain has a 37 percent revenue exposure to Latin America, against 5 percent for Europe.

"Further declines in Latin American currencies could lead to more earnings weaknesses in countries such as Spain."

The currency crisis took its toll on Spanish stocks, with the country's benchmark IBEX index falling 2.8 percent to a two-week low, the worst daily performance in 5 months. It was down more than 5 percent this week and stayed on track for the worst week in one year.

Some analysts, however, saw bargains after the sell-off.

"The Spanish stock market is a high beta market and goes up relatively more on good news, but falls more on bad news. As the European economy improves, the periphery will have the biggest leverage to the recovery," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.

"Therefore this correction may represent a buying opportunity."

The Spanish stock market dragged down the pan-European FTSEurofirst 300 index, which fell 1.4 percent to 1,314.96 points by 1158 GMT.

The index turned negative for the year after Friday's sell-off, which resulted in the Euro STOXX 50 volatility index , Europe's widely-used measure of investor risk aversion surging 14 percent to a three-month high.

Friday's losses for the FTSEurofirst 300 were on the top of a more than 1 percent drop in the previous session and placed it on track to post its biggest weekly fall since mid-December.

European equities have retreated after scaling new highs this month that saw the FTSEurofirst 300 setting a 5-1/2-year peak and Germany's DAX hitting record highs, as concerns about the fourth-quarter earnings season have risen.

Sentiment worsened after weaker-than-expected sales from Starbucks (Berlin: SRB.BE - news) and an earnings miss from McDonald's overnight, underscoring the still fragile health of the global economy. In Europe, Stora Enso (Xetra: ENUR.DE - news) said it plans to close a paper-making machine due to weak demand.

"We are not having high expectations from this earnings season. It is not likely to be spectacular," said Ronny Claeys, senior strategist at KBC Asset Management.

"Investors are looking for some guidance from companies for 2014 and that's going to be very crucial for the market."

STOXX Europe 600 firms are on average seen missing consensus quarterly earnings forecasts by 2.4 percent, according to StarMine SmartEstimates, which focus on the up-to-date predictions of the historically most accurate analysts.