* FTSEurofirst 300 down 0.5 pct
* Russia-exposed DAX leads regional fallers
* BHP up on spin-off prospects; miners buck weak trend
By Tricia Wright
LONDON, Aug 15 (Reuters) - European shares sharply reversed earlier gains to end in negative territory on Friday, led down by the Russia-exposed DAX index, on news of a Ukrainian attack on a Russian convoy.
Ukraine said its forces had attacked and partly destroyed a Russian armoured column that entered Ukrainian territory overnight, a firefight which, if confirmed, would mark a dramatic worsening of the conflict.
Equities had been underpinned most of the session by expectations for a continuation of ultra-loose monetary policy after poor U.S. and euro zone data.
But the news of the clash saw the FTSEurofirst 300, up almost 1 percent earlier on Friday, drop 0.5 percent to 1,323.10 points. Germany's DAX, dominated by firms heavily dependent on Russian energy, sank 1.4 percent.
Some fund managers were avoiding equities, for now.
"Markets remain at the mercy of the latest headlines. (I would) stay on the sidelines for the next few days," said Lex van Dam, a hedge fund manager at Hampstead Capital.
Mining stocks eked out small gains, helped by BHP Billiton after the world's biggest miner confirmed its preference for a demerger of unwanted aluminium, manganese and nickel assets. Its shares rose 1.2 percent.
Mining firms have been shedding assets in recent years in a bid to boost profits in the face of falling commodity prices, strengthening the investment case for the sector.
"(Capital) discipline is something that's very important, I think, to see share price performance ... It is encouraging for the sector overall," James Butterfill head of equity strategy at Coutts, said.
Peer Rio Tinto climbed 0.9 percent.
Trading volumes were relatively resilient in spite of a public holiday in a number of European countries - although stock markets mostly remained open across the region, apart from a few countries including Italy and Greece.
The FTSEurofirst 300 traded almost 90 percent of its 90-day daily average on Friday.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Additional reporting by Blaise Robinson and Alexandre Boksenbaum-Granier; Editing by Robin Pomeroy)