* Euro STOXX 50 closes down 3.4 pct
* Carmakers, luxury goods stocks underperform again
* Henkel shares sink 9 pct on results, China exposure
* Goldman Sachs downgrade hits Delta Lloyd shares
* Europe bourses in 2015: link.reuters.com/pap87v (Updates with closing prices)
By Sudip Kar-Gupta
LONDON, Aug 12 (Reuters) - European shares extended the week's sell-off on Wednesday after China allowed the yuan to weaken further, hitting export-focused stocks for a second straight day.
China is the second-biggest buyer of EU goods after the United States and its surprise devaluation this week has heaped market pressure on European makers of cars, luxury goods and consumer products.
The pan-European FTSEurofirst 300 index closed down 2.7 percent, while the euro zone's blue-chip Euro STOXX 50 index was down 3.4 percent, its second-worst daily performance since January.
Only 37 stocks out of the 600 on the STOXX Europe 600 were in positive territory.
German automakers Daimler and BMW were down 3.7 to 5 percent, while luxury-goods group LVMH was down 5.5 percent.
"We stay underweight German autos, luxury and capital goods with high China exposure," Credit Suisse strategist Andrew Garthwaite said in a note to clients.
Data also showed industrial output in the 19-member euro zone fell by more than expected in June, as activity in the currency bloc's main economies of Germany, France and Italy fell markedly.
The yuan hit a four-year low on Wednesday.
The People's Bank of China move has sparked fears of a global currency war and accusations that Beijing was giving an unfair advantage to its struggling exporters.
"We had a decent run-up but this is all unwinding pretty quickly. A competitive devaluation of currencies is never good," Mirabaud Securities European equity sales executive, Rupert Baker, said.
"I'd be avoiding areas such as carmakers and luxury goods companies," he said.
Shares of consumer-goods company Henkel sank 9 percent after it saw a slowdown in organic revenue growth at its adhesives business. The company said it remained optimistic for its business in China.
Consumer goods group Unilever also lost ground after being downgraded by Goldman Sachs, while Dutch insurer Delta Lloyd fell sharply for the second day in a row.
The FTSEurofirst and Euro STOXX 50 indexes remain up about 11 percent since the start of 2015, partly due to economic stimulus measures from the European Central Bank.
However, Deutsche Bank strategists warned of volatile times ahead. "Our rates strategists think that the China devaluation is a recipe for higher volatility across all asset classes," they wrote in a note.
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up (Editing by Tom Heneghan)