* Swiss SMI index down 4.3 pct, hits 13-month low
* FTSEurofirst 300 mostly unchanged
* Analysts slash profit forecasts for Swiss firms
By Blaise Robinson and Francesco Canepa
PARIS, Jan 16 (Reuters) - Swiss stocks sank on Friday, extending the sell-off sparked by the Swiss National Bank's surprise decision to remove a ceiling on the Swiss franc that sent the currency soaring.
Watchmakers Swatch and Richemont - seen as the most vulnerable to a higher franc because they are largely produced in Switzerland but sold abroad - were down 5.6 percent and 6.3 percent respectively, adding to losses on Thursday.
The surprise move by the SNB to scrap a three-year-old cap on the value of the franc shocked financial markets on Thursday. A wave of profit warnings from Swiss companies is now expected, and investment banks including JP Morgan and Societe Generale have slashed their earnings forecasts for several companies.
With more than 40 percent of Swiss exports going to the euro zone, companies across Switzerland are set to suffer a plunge in profits, analysts and fund managers warned.
"The likelihood is that the Swiss economy will have to be completely recalculated," said Lorne Baring, managing director of Geneva-based wealth management firm B Capital. "Tourism and exporters will feel this ... and Swiss investors with euro zone and U.S. holdings will feel betrayed by the Swiss National Bank."
At 1119 GMT, the Swiss blue-chip index SMI was down 4.3 percent, adding to a 8.7 percent slump on Thursday. The index hit a 13-month low in early trade.
The pan-European FTSEurofirst 300 index was flat at 1,393.64 points, trimming gains made late on Thursday. Investors decided then that ditching the franc's cap meant the SNB was anticipating a European Central Bank programme to buy government bonds, which should support euro zone equities.
A number of fund managers and traders felt the market had by now mostly priced in the introduction of such a quantitative easing programme by the ECB next Thursday.
"QE (speculation) has been around for so long that I think it will be a 'buy the rumour and sell the announcement'," said Markus Huber, a trader at Peregrine & Black.
Greek shares lagged on Friday, with Athens's benchmark down 2.9 percent. Two of the country's lenders asked to tap the central bank's Emergency Liquidity Assistance facility, showing financial stress was building up before the country's general election next weekend, which anti-bailout party Syriza is tipped to win.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
Editing by Larry King