Europe stocks fall for 3rd day; miners, autos sink

* FTSEurofirst 300 down 2.7 pct, flirts with 5-year lows

* Spectre of global downturn, earnings woes weigh

* Credit Suisse's big quarterly loss hits banking stocks

* ABB tumbles 13 pct on weaker-than-expected results

By Blaise Robinson

PARIS, Oct 23 (Reuters) - European stocks sank nearly 3 percent by midday on Thursday, weaker for the third day in a row and flirting with 5-year lows touched recently as the spectre of a global downturn hit industrials, carmakers and miners.

Banks also took a beating, with Credit Suisse (CSGN.VX) sinking 8.5 percent after the Swiss banking heavyweight unveiled a hefty quarterly loss and warned the rest of the year would be tough.

At 1056 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 2.7 percent at 850.39 points in a seesaw session. The benchmark index, which has now lost 44 percent year-to-date, tumbled to as low as 847.79, within sight of a 5-year low touched two weeks ago.

Swiss power equipment maker ABB AG (ABBN.VX) plummeted 13 percent after posting weaker-than-expected quarterly net profit and orders as customers hesitated about investing in infrastructure. French rival Alstom (ALSO.PA) dropped 10 percent.

"Recession seems to be a near certainty and in a way that's a good thing for markets because historically, once recession actually does kick in, markets start to pick up because they can see light at the end of the tunnel. It's the fear of recession that is doing this," said Ryan Kneale, markets analyst at BetsForTraders.com, which offers fixed-odds financial bets on markets.

Shares of automakers were also deep into the red, with Daimler (DAIGn.DE) falling 6.5 percent after the maker of Mercedes-Benz luxury cars and heavy trucks slashed its profit forecast and suspended its share buyback programme. Italy's Fiat (FIA.MI) set the tone earlier when it unveiled a bleak forecast for next year, saying global demand for its products could drop 10 to 20 percent in a "worst-case" scenario. Fiat's stock tumbled 5.6 percent.

France's Renault (RENA.PA) and Peugeot (PEUP.PA) were down 8.6 percent and 7.9 percent respectively.

The European auto sector has been one of the worst hit in 2008, with Renault down 74 percent so far this year, Peugeot down 66 percent, Fiat down 65 percent and Daimler down 64 percent.

Mounting fears that the economic downturn would spread to emerging economies - previously seen as relatively immune from the turmoil in financial sectors in the United States and Europe - also added to the gloom.

Shares in German retailer Metro (MEOG.DE) plunged 17 percent on a slew of rating and price target downgrades triggered by rising concerns over the outlook for sales in eastern Europe.

"The outlook for sales in eastern European, which was always a source of hope for investors, seems to be worsening," a trader said.

Miners were also big losers on Thursday, as metal prices added to recent sharp losses on global recession fears, with copper sinking to a three-year low. Rio Tinto (RIO.L) was down 9.8 percent and BHP Billiton (BLT.L) down 8.1 percent.

Shares in Air France-KLM (AIRF.PA) lost 9.7 percent after it gave a bleak outlook and set out a capacity standstill.

Around Europe, Germany's DAX index .GDAXI was down 4.2 percent, UK's FTSE 100 index .FTSE down 2.5 percent and France's CAC 40 .FCHI down 3.3 percent.

So far this year, the DAX has lost 46 percent, the FTSE 100 is down 39 percent and the CAC 40 is down 43 percent, as fears that the credit crisis would trigger a global recession sparked a sharp equity and commodity selloff. (Additional reporting by Amanda Cooper in London; Editing by David Cowell)