* Short interest in Russia-exposed stocks surge
* Analysts flag risk of capital controls
By Francesco Canepa
LONDON, Dec 17 (Reuters) - Fears of a full-blown crisis in Russia are leading investors to build up negative bets on European companies exposed to the country, such as brewer Carlsberg or Finnish tire-maker Nokian Renkaat .
Even after a 20 to 30 percent fall in some of these companies' share prices over the past three weeks, linked to the downward spiral in the rouble, investor sentiment on Russia is bleak due to the prospects of recession, possible capital controls and further writedowns on assets there.
Nine out of 14 Russia-exposed stocks in Europe tracked by Reuters saw a daily rise in short interest at Tuesday's close, according to Markit, with seven also seeing a weekly rise.
"There is a bit of panic and people are getting worried there could be an escalation," Markus Huber, a senior trader at Peregrine & Black, said.
Nearly a fifth of Nokian Renkaat's shares are out on loan to short sellers, according to Markit data. Short sellers borrow a stock and sell it, betting they will be able to buy it back at a lower price before returning it to the lender, pocketing the difference.
Short interest in the Finnish company has doubled since August, when the rouble began its slide, and is up one percentage point over the past week.
The company generates around 35-40 percent of its earnings before interest and taxes in Russia, according to Bank of America Merrill Lynch estimates for this year.
"Earnings visibility has deteriorated substantially," analysts at the bank wrote in a note, cutting their recommendation on the stock to "underperform" from "buy"
"In addition the potential for Russia to introduce capital controls continues to rise and this may lead to possible dividend conservatism at Nokian."
Austria's Raiffeisen Bank International, which relies heavily on profits from Russia, saw short interest in its stock almost double in the space of two weeks.
While it currently stands at a relatively low 2.4 percent of its share capital, this is partly due to less than 8 percent of the company's stock being available to be borrowed.
Short interest in Carlsberg, traditionally close to zero due to the defensive nature of the company's business, has doubled in the space of a month and now stands at 3.4 percent of the company's share capital.
"The uncertainty surrounding Russia exposure is just too much," Jyske Bank analysts wrote in a note to clients, recommending selling the shares. (Editing by Lionel Laurent and Hugh Lawson)