* FTSEurofirst 300 down 0.4 percent
* Oil majors, oil services hit by renewed slump in crude
* H&M boosted by forecast-beating sales
* JPMorgan upgrades European equities to 'overweight'
By Blaise Robinson
PARIS, Nov 17 (Reuters) - European shares dropped on Monday, hit by concern over the pace of global growth after data showed Japan, the world's third-largest economy, unexpectedly slipped into recession.
Shares in Hennes & Mauritz bucked the trend, rising 1.3 percent after the world's second-biggest fashion retailer posted a 14 percent rise in October sales from a year ago, beating forecasts.
At 0853 GMT, the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,339.92 points.
Japan's economy shrank an annualised 1.6 percent in July-September, following a 7.3 percent drop in the second quarter in the wake of a sales tax hike that clobbered consumer spending.
Analysts polled by Reuters had expected 2.1 percent growth in the third quarter. But consumption and exports remained weak, saddling companies with huge inventories.
Tokyo's Nikkei index tumbled 3 percent, its biggest one-day slump since August.
"It's a bit of shock for the market because people believed that the Bank of Japan had everything under control. But overall the initial negative reaction shouldn't last too long. Investors still expect central bank action worldwide to support the global economy," FXCM analyst Nicolas Cheron said.
Japan's data hit Brent crude, down more than $1 to near $78 a barrel, further pressuring shares in European oil majors and oil services groups.
Fugro dropped 6.2 percent, Saipem fell 1.9 percent, Repsol shed 1 percent and Royal Dutch Shell fell 0.6 percent.
The STOXX energy sector index has tumbled 20 percent since late June, tracking a slump in crude prices which has sparked speculation that big energy majors will suspend a number of projects and slash capital expenditure.
The FTSEurofirst 300 index of top European shares is up 1.8 percent so far in 2014, falling behind a 10 percent rally for Wall Street's S&P 500 over the same period.
Citing this underperformance, JPMorgan strategists upgraded European equities to 'overweight' from 'underweight' on Monday, noting attractive valuation levels as well.
"Eurozone P/E (price-to-earnings) relative has moved from record expensive to the cheap side of fair value. Eurozone earnings have never been as depressed vs the U.S. as they are now," the strategists wrote. (Editing by Hugh Lawson)