UPDATE 1-Outokumpu sees weak demand; Q3 misses f'casts

* Q3 op.loss 65 mln euros vs 48 mln loss avg in poll

* Sales slump 54 pct, missing all estimates

* Sees Q4 underlying result up from Q3, sticks to outlook

* Says underlying demand in stainless steel remains weak

* Shares slump 8 percent

(Adds detail, quotes)

HELSINKI, Oct 22 (Reuters) - Finnish stainless steel maker Outokumpu (OUT1V.HE) said it saw no signs of an upturn in demand for the metal after third quarter sales and profits slumped, but it stuck to its goal of breaking even at year-end. "Stainless steel markets have not seen any major improvement. Underlying demand continues to be weak and the purchasing behaviour of steel distributors is very much driven by short-term developments in the nickel price," Outokumpu Chief Executive Juha Rantanen said in a statement.

The firm's shares fell sharply in opening deals and were down 8 percent at 12.56 euros at 0705 GMT. Shares in Europe's biggest stainless steel manufacturer, ThyssenKrupp (TKAG.DE), were down 2.8 percent.

Stainless steel makers have been hit hard as demand for the rust-proof metal used in products from kitchenware to machinery and aircraft components has fallen sharply in the recession.

Outokumpu slumped to a July-September loss of 65 million euros ($97.1 million), flat year-on-year but missing the mean estimate of a loss of 48 million in a Reuters poll. Sales tumbled 54 percent year-on-year to 587 million euros, missing all estimates in the poll where the average estimate was for 702 million.

But it stuck to its previous outlook of a break-even towards the end of the year on the back of improved prices, higher delivery volumes and cost controls, and added it expected its underlying result to improve in the fourth quarter from the third.

(editing by John Stonestreet)