European shares end down on eurozone debt concerns

* FTSEurofirst 300 index falls 0.2 pct

* Euro zone worries intensify after Fitch downgrades Greece

* BP gains as Mitsui pays to settle oil spill claim

By Harpreet Bhal

LONDON, May 20 (Reuters) - European shares fell on Friday, with investors reducing their exposure to riskier assets as concerns over the euro zone debt crisis intensified after ratings agency Fitch downgraded Greece's credit rating.

Traders said a lack of positive drivers in the market pushed buyers to the sidelines, while confidence remained fragile ahead of elections in Spain and uncertainty over how Greece's debt problems could be contained.

Losses, however, were limited by gains in heavyweight BP , which rose 2.7 percent after scoring a major win in sharing the cost of the Gulf of Mexico spill as partner Mitsui & Co agreed to pay $1.1 billion towards the clean-up bill. [ID:nLDE74J06S]

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed 0.2 percent lower at 1,136.12 points, bringing total losses for the week to 0.4 percent.

Fitch pushed Greece's credit rating deeper into junk territory and warned of further downgrades if a credible plan to resolve the country's debt crisis was not found. [ID:nLDE74J1K7]

"Towards the end of the week people decided to take some profits. There is still uncertainty regarding restructuring in Greece," said Markus Huber, senior trader at ETX Capital.

"There's nothing out there to push things higher, and there is a lack of buyers. Investors have the feeling that in a few days time they can buy at lower levels."

Banks fell on concern over exposure to Greek debt, with the STOXX Europe 600 banking index <.SX7P> down 0.8 percent.

Peripheral stocks slipped, with the Thomson Reuters Peripheral Eurozone Index <.TRXFLDPIPU> down 2.1 percent.

"The (Fitch) downgrade is a further confirmation of the lack of confidence in Greece's ability to meet targets previously agreed as part of a bailout. It seems inevitable that some kind of debt restructuring will now have to take place," a London-based equity trader said.

Investors will also be monitoring the local elections in Spain on Sunday, with the ruling Socialist party expected to suffer heavy losses over its handling of the economic crisis, a prominent pollster said. [ID:nLDE74J09D]

SHORT-TERM HEADWINDS

Analysts said the market could be going into a period of short-term weakness on slowing earnings momentum, currency headwinds and expectations of an end to the U.S. Federal Reserve's quantitative easing programme, though longer-term fundamentals such as cheap valuations and healthy balance sheets should help limit downside pressure.

"Earnings in Europe have provided a very nice tailwind to the market ... but that tailwind has begun to fade now. We also have a currency headwind and the business cycle indicators have started to turn down, another reason to be a bit more cautious in the shorter term," said Robert Parkes, strategist at HSBC.

"But at the same time we feel that the downside risk is limited because of the valuation support, the health of companies and balance sheets and M&A."

Equity valuations on Thomson Reuters Datastream showed the STOXX Europe 600 <.STOXX> carrying a one-year forward price-to-earnings of about 10.8 against a 10-year average of 13.5.

Among the fallers on the index were clothing retailers Hennes & Mauritz and Inditex , which fell 1.5 and 2.4 percent after U.S. rival Gap Inc slashed its full-year profit outlook on rising cotton costs.

On the upside, Associated British Foods gained 3.1 percent after Exane BNP Paribas upgraded it to "outperform" from "neutral" on valuation grounds. (Editing by Will Waterman)