* FTSEurofirst 300 down 0.2 pct, reverses early rebound
* Greek assets under pressure again
By Blaise Robinson
PARIS, Oct 16 (Reuters) - European shares reversed an early rebound and slipped again on Thursday morning, resuming their month-long sell-off as worries over the strength of the global economy and fears of deflation in the euro zone kept investors on edge.
At 0820 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,249.39 points, after gaining as much as 1 percent at the open.
The index sank 3.2 percent on Wednesday, suffering its biggest one-day slide since late 2011. The slump represented a wipe-off in market value of about $255 billion for European stocks listed on the broad STOXX Europe 600 index, more than the GDP of Portugal.
“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.”
Southern European markets were the most hit on Thursday, with Spain’s IBEX down 1.4 percent, Italy’s MIB down 1.1 percent and Portugal’s PSI 20 down 1.5 percent.
The acceleration of the ‘risk-off’ trade in the last few days was also visible in other asset classes, with investors cutting exposure to the most risky 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.
Switzerland’s SMI stock index was also down, losing 0.9 percent after the government cut its economic outlook. Nestle, the world’s biggest food group, was down 2.6 percent after posting disappointing sales figures, dragging on the index.
On Wednesday, Washington renewed a warning that Europe risks falling into a downward spiral of falling wages and prices, saying recent actions by the European Central Bank may not be enough to ward off deflation.
In a semiannual report to Congress, the U.S. Treasury Department also said Berlin could do more to help Europe, namely by boosting demand in the German economy, Europe’s largest.
However, a raft of reassuring corporate results helped limit the market’s losses on Thursday.
Shares in Swiss drugmaker Roche rose 0.5 percent after it reaffirmed its full-year sales and profit targets as a strong performance by its new breast cancer drugs helped it beat expectations in the third quarter.
French spirits group Remy Cointreau gained 0.7 percent after it confirmed full-year targets for organic growth.
Shire featured among the top losers again, down 8.1 percent and plummeting for a second day, after U.S. pharmaceutical company AbbVie Inc recommended that shareholders vote against its $55 billion takeover of Shire in the wake of a U.S. government move to curb deals designed to cut high taxes. Shares in Shire tumbled 23 percent on Wednesday after AbbVie said it was reconsidering its bid.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up
Editing by Catherine Evans