(Adds quote, updates prices)
* FTSEurofirst 300 down 0.4 pct, Euro STOXX 50 down 0.6 pct
* ASML slides after Q3 results
* Skanska warns of impact on earnings from writedowns
* New business in-flows lift Hargreaves Lansdown shares
By Sudip Kar-Gupta and Danilo Masoni
LONDON/MILAN, Oct 14 (Reuters) - European shares fell for a third day on Wednesday as new concerns about deflationary pressures in China hit equity markets, while technology group ASML and builder Skanska slid after weak business updates.
Data on Wednesday showed that consumer inflation in China eased more than expected in September while producer prices fell for the 43rd straight month.
The pan-European FTSEurofirst 300 index fell 0.43 percent while the euro zone's blue-chip Euro STOXX 50 index declined by 0.6 percent.
Germany's DAX also fell 0.8 percent, leaving the DAX some 20 percent below a record high reached in April.
European stocks have retreated from those April peaks, due partly to the signs of weakness in China, the world's second biggest economy and a major overseas market for European companies such as carmakers and luxury goods groups.
"Chinese data are weighing on sentiment, along with a disappointing earning reports from JPMorgan in the U.S. But we shouldn't forget that we've just left behind the best week of the year and some profit taking is normal," said Marco Vailati, head of research at Cassa Lombarda, said.
Data on Wednesday showing euro zone industrial output fell in August was giving another reason to take profit, he said.
ASML, a supplier to top global semiconductor makers, was one of the biggest fallers, dropping 4.2 percent after its third-quarter earnings came in slightly below analysts' expectations, and with fewer than expected new bookings.
Sweden-based builder Skanska fell more than 8 percent, its worst day since August 2011, after it said writedowns would hit its third quarter profits.
Danish jewellery firm Pandora fell 6 percent after a dealer survey pointed to softer sales in the U.S..
However, British financial company Hargreaves Lansdown rose 5.1 percent, the best performer on the pan-European STOXX 600 index.
Even though Hargreaves reported a drop in first quarter assets under administration, investors were pleased by the fact that the company's new business in-flows had hit a record high.
Portugal's blue-chip index PSI rose 0.7 percent, outperforming the rest of Europe, although political uncertainty persisted after political parties failed on Tuesday to reach a deal on forming a new government.
"Strong falls in bank shares in the last few days, especially Millennium BCP, drew the attention of investors who took advantage to get back into these stocks at lower prices amid high volatility," said Albino Oliveira, an analyst at Fincor brokers.
"The lack of reaction in debt yields to the environment of political uncertainty shows the market is following the situation but is not stressing out about it."
Today's European research round-up (Additional reporting by Patricia Rua in Lisbon)