Europe shares sag as U.S. tech sector sell-off spreads
* FTSEurofirst 300 down 1.8 pct, loses 3.4 pct in week
* High-beta banking stocks also hit
PARIS, April 11 (Reuters) - European stocks sank on Friday, extending the week's retreat and mirroring a sell-off on Wall Street led by technology and biotech shares that has been fuelled by worries some stock valuations are overstretched.
European tech shares were among the most hit, with ARM , whose chip designs feature in smartphones such as Apple's iPhones, falling 4.9 percent.
ASML, the world's biggest manufacturer of tools for the semiconductor industry, dropped 3.9 percent, telecom gear maker Alcatel-Lucent lost 4 percent and chip maker Infineon fell 3.3 percent.
"There's been contagion from the correction in the U.S. which is probably not over, but the fact is: this is mostly a U.S. correction," said David Thebault, head of quantitative sales trading at Global Equities, in Paris.
"People are getting out of overvalued sectors and looking for bargains elsewhere. The market's positive longer-term trend is still intact, this pull-back will just remove the froth."
European tech stocks have been trading at a premium to the overall market, but unlike peers on Wall Street, valuations have not spiked.
The STOXX Europe 600 tech index trades at 19.7 times expected earnings, according to Thomson Reuters data, with health care, industrials, travel, and leisure and construction sectors more expensive.
At 1421 GMT, the FTSEurofirst 300 index of top European shares was down 1.8 percent at 1,306.70 points, on course to post losses of 3.4 percent for the week.
On Thursday, the Nasdaq suffered its biggest drop in 2 1/2 years, losing 3.1 percent, with the Nasdaq biotechnology index sinking 5.6 percent.
"We've recently taken a little bit out of equities," said Veronika Pechlaner, who helps manage $13 billion of assets at Ashburton Investments.
"During the first quarter, when the market came back strongly, we decided to lock in some of our gains that we made in a good fourth quarter. It might be a little bit early to talk about redeploying that."
European banking shares, which have been more volatile than the broad market in recent years, also featured among the top losers on Friday, with Bankinter down 3.6 percent and Natixis down 3.7 percent.
The STOXX Europe 600 banking index is on course to post a loss of 5 percent for the week.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Additional reporting by Alistair Smout; Editing by James Regan)