* FTSEurofirst 300 dips 0.6 pct, Euro STOXX 50 down 0.6 pct
* DAX set for biggest weekly loss since last June
* Short-selling books thriving -Lyxor's Asseraf-Bitton
* U.S. flows into Europe equities slow -Lipper
PARIS, March 14 (Reuters) - European shares fell on Friday, extending their pull-back as tensions in Ukraine before a weekend referendum in the Crimea peninsula unnerved investors.
Russia launched new military exercises near its border with Ukraine on Thursday, even as Washington cautioned that Moscow risked facing serious consequences if annexation was the outcome of the planned Crimea referendum.
"The geopolitical risks are back at the forefront of investors' minds," said Jeanne Asseraf-Bitton, head of global cross-asset research at Lyxor Asset Management, which has $110 billion under management.
"On the longer term, with stocks more or less at fair value now and the multi-month market rally losing steam, hedge fund strategies are thriving. Short-selling books are making good money again."
The European Union has drawn up a list of 120-130 names of senior Russian officials who could be subjected to travel bans and asset freezes as part of EU sanctions, European officials told Reuters.
Shares of companies most exposed to Russia such as Finnish tyre maker Nokian Renkaat, and Danish brewer Carlsberg were under pressure, both falling 1 percent. The two firms derive 26 percent and 17 percent respectively of their revenues from Russia, according to data from MSCI.
At 1108 GMT, the FTSEurofirst 300 index of top European shares was 0.6 percent lower at 1,285.90 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.
Around Europe, UK's FTSE 100 index was down 0.2 percent, Germany's DAX index down 0.4 percent, and France's CAC 40 down 0.7 percent.
On the M&A front, shares in Iliad and Bouygues were down 6.4 percent and 5.2 percent respectively while Numericable added 3.7 percent after sources said a board sub-committee of Vivendi charged with evaluating the two competing bids for its telecom unit SFR favoured the offer from Numericable.
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