* FTSEurofirst 300 dips 1 pct, Euro STOXX 50 off 1.4 pct
* Euro STOXX 50 breaks below support, in bearish signal
* Europe stocks benefit from emerging market outflows-SG
* Luxury stocks buck trend as LVMH results reassure
PARIS, Jan 31 (Reuters) - European stocks fell on Friday and were poised to record their first monthly loss since August, extending a recent slide on concerns that European companies' results will be hit by turmoil in emerging markets.
Also rattling investors, data showed an unexpected drop in euro zone inflation, reviving fears that the region could be slipping into deflation.
At 1545 GMT, the FTSEurofirst 300 index of top European shares was down 1 percent at 1,281.78 points, set to post a monthly loss of 2.6 percent.
The euro zone's blue-chip Euro STOXX 50 index was down 1.4 percent at 2,985 points, with technical charts showing the benchmark index breaking below a positive trend line started in June, sending a bearish signal.
The Euro STOXX 50's next target on the downside is 2,916 points, representing a low that was hit in mid-December, and below that, the index's next big support level will be at 2,877 points, the 200-day moving average.
"It's most likely that the correction goes on until European indexes test their 200-day moving averages," said Lionel Duverger, technical trading strategist at B*Capital. "This should then bring interesting buying opportunities for the medium to long term, although we're not there yet."
Financial assets in a number of emerging economies have recently been rocked by the prospect of reduced stimulus from the U.S. Federal Reserve.
The Fed announced on Wednesday a second cut in its quantitative easing programme, which had fuelled a sharp rally in global equities in 2013. Reduced U.S. stimulus has prompted investors to repatriate investments from emerging markets, which have suffered massive outflows and sent local currencies plunging.
European companies with strong exposure to emerging markets dropped again on Friday, with Austrian lender Erste Group down 2.4 percent and global brewer SABMiller falling 1.4 percent. The two firms derive about two-thirds of their revenues from emerging markets.
According to data from MSCI, European companies have a much bigger exposure to emerging markets than U.S. or Japanese companies, about 24 percent overall for firms listed on the MSCI Europe index, versus 15 percent for the MSCI United States index and 14 percent for the MSCI Japan index.
Despite the market's pull-back over the past 10 days, data shows European stocks continue to enjoy brisk investment inflows, in sharp contrast with massive outflows rocking emerging market funds.
According to Thomson Reuters Lipper, U.S.-based funds poured $450 million into European equities in the seven-day period ended Jan. 29, bringing the total net inflows from U.S. investors in 2014 to $3 billion. During the same period, U.S. investors pulled $2.6 billion from emerging markets equity funds.
"We see no early end to emerging market asset de-rating," Societe Generale cross-asset strategist Arthur Van Slooten said in a note, saying European stocks should benefit from geographical rotation from asset managers.
"The Fed remains assertive on execution of tapering despite recent turmoil within the emerging market world, which spells more turbulence ahead. While current emerging volatility is impacting developed markets as well, some of the flows are being redirected toward Europe, notably into Italy, Spain and the UK," Van Slooten said.
Shares in luxury goods makers bucked the trend on Friday, recovering from a recent slump after reassuring results from Louis Vuitton owner LVMH, which eased investor worries about the sector's outlook given China's slowing economic growth.
LVMH shares jumped 7 percent, while Hermes added 3.7 percent. But despite the day's rally, luxury shares remained in the red this month. The sector - seen as a safe-haven for fund managers during the heat of the euro zone debt crisis due to its strong exposure to emerging markets - has recently fallen out of favour, hurt by doubts over the pace of growth in emerging markets.
Interactive map of emerging markets currency performance:
Europe bourses in 2014:
Asset performance in 2014: