Europe shares lose 1%; Bear sparks bank worries

LONDON, March 14 (Reuters) - European shares closed about 1 percent lower in a volatile session on Friday after news of emergency financing to Bear Stearns stoked fresh worries about the impact of the credit crisis on banks.

The FTSEurofirst 300 index closed unofficially down 0.95 percent at 1,256.37 points having yo-yoed in and out of positive territory.

JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and the Federal Reserve Bank of New York on Friday agreed to provide emergency financing to Bear Stearns BSC.N after the investment bank said its cash position had deteriorated sharply, sending its shares into freefall.

A 50-percent drop in stocks of the fifth-largest U.S. investment bank poured gloom over the financial sector on both sides of the Atlantic and banks were the biggest negative weight on the European index.

UBS (UBSN.VX: Quote, Profile, Research) -- which has been a major victim of the credit crisis among major European banks -- was down more than 7 percent. HSBC (HSBA.L: Quote, Profile, Research) fell 1.9 percent, HBOS (HBOS.L: Quote, Profile, Research) shed 6.1 percent, BNP Paribas (BNPP.PA: Quote, Profile, Research) lost 2.5 percent and Barclays (BARC.L: Quote, Profile, Research) dropped 3.9 percent. (Reporting by Ana Nicolaci da Costa)