* FTSEurofirst 300 index falls 0.6 percent
* Index slips after European Commission forecasts
* Energy companies fall sharply on weaker oil prices
By Atul Prakash
LONDON, Nov 4 (Reuters) - European shares fell on Tuesday as the European Commission’s move to cut its growth forecast for the euro zone prompted investors to trim their equity exposure and a sharp drop in oil prices tripped up energy shares.
The STOXX Europe 600 Oil and Gas index fell 3.3 percent, the biggest sectoral decliner, tracking a drop in crude oil to a more than four-year low after Saudi Arabia cut sales prices to the United States.
Energy companies Royal Dutch Shell, Total , Tullow Oil, Statoil, BG Group and Seadrill fell 1.7 to 8.6 percent.
After hitting an intra-day high of 1,346.49, the pan-European FTSEurofirst 300 index was down 0.6 percent at 1,332.31 points by 1529 GMT, after the Commission said the euro zone will need another year to achieve even modest growth.
“Expectations for growth in the euro zone are pretty low anyway,” HSBC’s director of equity strategy Robert Parkes said.
“A weaker growth outlook is a negative for the market, but it does increase the chances of further monetary stimulus in the euro zone.”
Cutting its forecasts, the EU’s executive Commission said the euro zone’s economy would expand 0.8 percent this year, 1.1 percent next year and by 1.7 percent in 2016 -- a level it had said six months ago would be achieved next year.
The delay in the upturn was due to drag on the economy from France and Italy. Weakness in the 18-country currency bloc, which generates a fifth of world economic output, is holding back a broader global revival led by the United States.
“There is still nervousness in the market about the euro zone’s economic outlook,” said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
“Certainly another year of sub-par growth into next year is not something that the market likes because investors have been banking on a recovery in corporate earnings and that might not get materialised in this environment.”
Better-than-expected earnings underpinned the market on Tuesday, however. Shares in German car parts and tyre maker Continental gained 1 percent after it said its profit margin could slightly beat targets this year as core European auto markets keep growing.
Securitas surged 9 percent after the Swedish security firm posted a bigger-than-expected rise in third-quarter core profit, while Spain’s Grifols rose 5.4 percent after posting a better-than expected 29.4 percent rise in adjusted net profit for the nine months to September.
“Earnings have been better than expected overall, and this is offsetting the bad macro data seen in Europe lately,” said Alexandre Baradez, chief market analyst at IG France.
Half way into Europe’s earnings season, 65 percent of companies have managed to meet or beat profit forecasts, while 57 percent met or beat revenue forecasts, according to Thomson Reuters StarMine data.
In absolute terms, profits are up 12.2 percent, while revenues are down 0.7 percent, highlighting the fact that Europe’s earnings rebound has mostly been coming from cost-cutting and lower financing costs.
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 in Paris; Editing by Catherine Evans)