* FTSEurofirst 300 dips 0.5 pct, DAX down 0.7 pct
* DAX suffering worst week in nearly two years
* U.S. flows into Europe equities slow -Lipper
PARIS/LONDON, March 14 (Reuters) - European shares fell to five-week lows on Friday, with German blue chips among the worst hit, as tensions in Ukraine ahead of a weekend referendum unnerved investors.
Russia launched new military exercises near its border with Ukraine on Thursday, even as the U.S. cautioned that Moscow risked facing serious consequences if annexation was the outcome of a referendum planned for Sunday in the Crimea peninsula.
"I'm short the whole lot (of European equity indexes)," said Alex Chehade, senior dealer at spreadbetter Tradenext. "I'm long bonds and gold - there's a real flight to safety here."
German blue chips saw some of the biggest losses, with fertiliser maker K+S dropping 3.1 percent and HeidelbergCement losing 2.7 percent. Frankfurt's DAX index fell 0.7 percent, set to post a weekly loss of 4.2 percent, its worst weekly performance in nearly two years.
Shares of companies most exposed to Russia such as Finnish tyre maker Nokian Renkaat, and Danish brewer Carlsberg were also among the biggest losers, falling 1.5 percent and 1.3 percent respectively.
The two firms derive 26 percent and 17 percent respectively of their revenues from Russia, according to data from MSCI.
At 0838 GMT, the FTSEurofirst 300 index of top European shares was 0.5 percent lower at 1,286.23 points, a level not seen since early February. The benchmark index has lost 4.9 percent since Feb. 25.
"The downside potential of this pull-back is about 5 percent. Once this is done, it will be a buying opportunity," Aurel BGC chartist Gerard Sagnier said.
The tension in Ukraine, as well as recent worries over the pace of growth in China, has been weighing on investment flows coming into Europe, according to data from Thomson Reuters Lipper.
In the seven days to March 12, inflows of U.S. money into European stocks were the slowest in eight months. A Lipper poll of 103 U.S.-domiciled funds invested in European stocks showed they raked in a net $301.9 million, the smallest inflow since July 2013, although the funds still extended their longest positive streak on record into a 37th week.
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