* FTSEurofirst 300 falls 1.9 pct, hits 13-month low
* Euro-zone banking index falls 3.4 percent
* Getinge slumps 15 pct after trimming sales forecast
By Atul Prakash and Blaise Robinson
LONDON/PARIS, Oct 16 (Reuters) - European shares extended their recent steep losses on Thursday, with a benchmark index slipping to a 13-month low, on mounting concerns over weakness in the global economy and fears of deflation in the euro zone.
At 1052 GMT, the pan-European FTSEurofirst 300 index was down 1.9 percent at 1,228.15 points after touching an intra-day low of 1,215.62, the lowest level since September last year. It has slumped more than 13 percent in four weeks.
"Nobody wants to sell at these levels, so this is not about investors taking the decision to cut positions, it's all about automatic stop-losses and forced sales due to margin calls," Christian Jimenez, fund manager and president of Diamant Bleu Gestion, said.
"And the more stocks go down, the more stop-losses get triggered. A negative spiral has started, and the news flow is clearly asymmetrical now. People only see the negative headlines. So it's definitely too early to buy."
Cyclical shares, which are more sensitive to economic conditions, were the worst hit. The euro zone's banking index fell 3.4 percent, the construction index was down 2.3 percent and insurers fell 2.6 percent.
The Euro STOXX 50 Volatility Index, a widely-used measure of investor risk aversion known as the VSTOXX, surged to 32, its highest since mid-2012, signalling a sharp rise in risk aversion. The index traded at around 19 only a week ago.
"We have a 'sell' position on the market in the short term," Aurel BGC analyst Gerard Sagnier said. "European indexes have confirmed the correction movement. The panic, coupled with stop-losses, is exacerbating the pull-back."
A ratio measuring the number of negative 'put' options versus bullish 'call' options on the euro zone's blue-chip Euro STOXX 50 index also surged to 2.3, marking its highest level since last August.
A ratio above 1.5 generally signals that investors are turning cautious, buying 'puts' as a hedge for their equity portfolios in case of a market sell-off.
The FTSEurofirst 300 index's fall continued from Wednesday, when it sank 3.2 percent, suffering its biggest one-day slide since late 2011. The slump wiped out about $255 billion from the market value of stocks listed on the broad STOXX Europe 600 , more than the GDP of Portugal.
Southern European stocks were hit hard, as investors dumped risky assets in the region. Across Europe, Britain's FTSE 100 , Germany's DAX, France's CAC, Italy's FTSE MIB and Portugal's PSI 20 fell 1.7 to 3.4 percent. Switzerland's SMI index was down 2.7 percent after the government cut its economic outlook.
"Mounting concerns about global growth, deflation worries in Europe and ongoing geopolitical risk are spooking the markets. Higher beta sectors such as banks are bearing the brunt of the sell-off," Robert Parkes, equity strategist at HSBC, said.
The acceleration of the 'risk-off' trade in the last few days was also visible in other asset classes, with investors cutting exposure to assets such as Greek bonds.
On Thursday, Greek 10-year government bond yields rose above 8 percent for the first time since February, driven by worries about Athens' plans to wean itself off international aid and the prospect of early elections. Athens's ATG stock index was down 1.2 percent, adding to recent sharp losses.
On Wednesday, Washington renewed a warning that Europe risks falling into a downward spiral of falling wages and prices. The U.S. Treasury Department also said Germany could do more to help Europe, namely by boosting demand in its economy, Europe's largest.
Swedish group Getinge slumped 15 percent after trimming its sales growth forecast for the year and said its short-term earnings outlook remained uncertain.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
Editing by Mark Trevelyan