European shares drop on global slowdown fears

* German DAX index hits lowest level since January

* Earnings expectations for Europe "too high"

* Ahold results impress, shares rise

* Europe bourses in 2015: http://link.reuters.com/pap87v

* Asset performance in 2015: http://link.reuters.com/gap87v

LONDON, Aug 20 (Reuters) - European stock markets extended their losing streak on Thursday, with benchmark indexes in Frankfurt and London hitting seven-month lows as fears of a global economic slowdown took hold.

Minutes from the U.S (Other OTC: UBGXF - news) . Federal Reserve's July meeting dented expectations for a rate hike in mid-September, amid worries over lagging inflation and slowing growth in China that have hit riskier assets around the world.

While there was some good news from Europe's second-quarter earnings season, with shares of Dutch retailer Ahold up 3.5 percent after a solid rise in profits, some traders pointed to lofty valuations relative to history and a darkening outlook for corporate earnings.

"The current earnings expectations for Europe given the global growth outlook are probably too high and it may require additional action from the ECB (European Central Bank)," Deutsche Bank Managing Director Nick Lawson said in a note to clients.

Citi cut global economic growth forecasts for 2016 to 3.1 percent, from 3.3 percent, citing significant downgrades for the euro area and China among others.

The pan-European FTSEurofirst 300 equity index was down 1 percent at 1,490.45 points. The index's losses for August have already matched those for June, which itself was the worst month in two years for the FTSEurofirst.

The export-focused German DAX index also weakened by 0.9 percent.

The shares of automotive supplier Continental (Swiss: CONT.SW - news) fell 1.7 percent after profits declined at family-owned Schaeffler AG, the biggest shareholder in Continental, while other auto stocks also lost ground.

With commodities markets in the grip of a sell-off that showed little sign of slowing, the shares of major oil companies also slid, with the STOXX Europe 600 Oil & Gas Index dropping 1.6 percent.

Today's European research round-up

(Editing by Alison Williams and Keith Weir)