Growth fears spark sharp slide in European shares

* 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: Quote, Profile, Research, Stock Buzz), 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 .FTEU3 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: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) slipped 3.6 percent percent each, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) dropped 3.5 percent and HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) 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. [ID:nN05415312]

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.  Continued...