* Firms with global reach seen excessively hit by sell-off
* Longer-term investors seek value after steep falls
* Diageo, Beiersdorf, Prudential tipped for recovery
By Francesco Canepa
LONDON, Feb 11 (Reuters) - A two-week sell-off in European shares exposed to emerging economies is luring investors to firms caught up in the storm and that now trade at unusually low prices, such as drinks giant Diageo and insurer Prudential.
An MSCI basket of stocks with the highest proportion of sales from emerging countries has fallen 3 percent this year, underperforming the broader market, as signs of a slowdown in China and capital flight from other emerging countries saw traders ditch assets linked to those regions.
Longer-term investors are spotting buying opportunities, particularly among companies with worldwide sales, where they think the market has been too hasty.
"When there are these sentiment swings, the markets do throw up opportunities for those who look," said Andrew King, head of European equities at BNP Paribas Investment Partners, who manages assets worth 10.4 billion euros ($14.16 billion) and tends to invest with a three- to five-year horizon.
BNP IP has taken a position in Diageo, the world's biggest spirits company, which has seen its shares plunge as much as 11 percent after it reported a drop in demand in China, where the government has implemented a crackdown on gift giving, and other emerging markets last month.
The stock is trading at its lowest price relative to expected earnings for 1-1/2 years and at a 10 percent discount to the sector, the steepest since 2009, Datastream data showed.
Diageo's shares have rebounded 8.5 percent over the past eight sessions, but the stock is still down around 10 percent from its January high.
Strategists at Bank of America-Merrill Lynch also recommend investors look for "fallen angels" among stocks that have underperformed the markets due to their emerging market exposure but which still boast strong earnings, management, balance sheet quality and potential for greater profitability.
In Europe, they highlight Nivea skincare creams maker Beiersdorf, which generates just a quarter of its sales in Asia, Africa and Australia but has seen its shares fall 4 percent since late January, in a broad sell-off that hit the entire emerging markets-exposed consumer goods sector.
Among financials, analysts at Barclays said insurer Prudential has been overly punished for its exposure to Asia, arguing blips in economic growth and market volatility were unlikely to scupper a 20-year structural growth story for insurers in the region.
They also expected the stock to receive a boost from its 2013 results, due next month, thanks to strong growth in the United States.
While Prudential is one of the largest life insurers in Asia, the British firm only generates a quarter of its revenues from the region, while half comes from the United States and the remaining quarter from Europe.
"Every time there are concerns about emerging markets, Prudential's valuation takes a beating," said Chris Roberts, an analyst at Barclays. "Then when it reports results, people see it hasn't impacted the business that much and that refocuses people on fundamentals."
Prudential traditionally trades at a hefty premium to its European peers thanks to its exposure to structural growth in Asia and the profitable U.S. market. The stock fell as much as 14 percent between mid January and early February, leaving the premium at 29 percent, the smallest since 2010.