* FTSEurofirst down 1.1 percent
* LSE, ICAP fall as business takes hit on volumes
* Sodexo fall as Barclay cuts rating on earnings risk
By David Brett
LONDON, Sept 26 (Reuters) - European shares fell on Wednesday as positivity around recent central bank stimulus continued to fade in the face of concerns about growth and earnings.
By 0742 GMT, the FTSEurofirst 300 had shed 12.37 points, or 1.1 percent, to 1,107.42, having risen 0.4 percent on Tuesday, buoyed late on by bullish macro economic data on Wall Street. That sentiment had soured by the U.S. close, however.
Traders cited weak corporate results, quarter-end profit taking and doubts over the effectiveness of the Fed's latest monetary stimulus as the S&P 500 suffered its worst day since June on Tuesday.
"If you are in the QE [quantitative easing] camp and were hoping for a sweet ride until the end of the year then this has been disappointing," Steen Jakobsen, strategist at Saxo Bank, said.
"We are in the 'blow off' phase. Many stocks are still great stocks but they are overvalued relative to the incoming economic situation," he said.
The FTSEurofirst has traded in a tight 20 point range since the United States announced further stimulus measures in early September as the index paused after nearly 18 percent gains since early June.
The rally was accompanied by low volumes, a result of the overall cautious sentiment among investors.
That was reflected by the London Stock Exchange and broker ICAP on Wednesday, after both reported big falls in trading over the summer, leaving them reliant on other sources of revenue to sustain profits.
LSE shed 2.1 percent, while ICAP fell 4.8 percent.
Other financial toiled too. Banks, which helped power gains over the European summer, enjoyed rerating to 10.8 times forward 12-month price-to-earnings, near post credit crisis highs, as weak second-quarter earnings combined with strong share gains.
Miners experienced a similar revival in valuations under similar circumstances, leaving investors pining for a recovery in earnings following fresh stimulus in Europe and the U.S.
"The aggressive liquidity injections announced by the ECB and the Fed have created a buy signal for risky assets," Barclays said in a note, retaining a bullish longer-term outlook.
"While we do not foresee a booming recovery any time soon, we do expect the recent deceleration in global growth to stabilize over the next few months, and that should be sufficient to spark further gains in risky asset prices," it said.
Earnings risks saw French catering-to-vouchers group Sodexo fall 4 percent as Barclays cut its rating on the company to "underweight" from "equalweight" saying full year results on Nov. 8 will be the trigger for consensus earnings revisions.
Concerns Apple Inc was struggling to keep up with demand for its new iPhone saw ARM, whose chip designs are used in the U.S. firm's smartphones, shed 2.4 percent.
Elsewhere, RSA Insurance dipped 3.4 percent after the company traded without a dividend.
There main risers were defensive stocks - companies and sectors whose products and services are perceived to remain in demand whatever the economic backdrop - which endured a relative period of underperformance while the broader market rallied in the three months since June.
UK utility SSE added 0.1 percent, while drug firm Novartis added 0.3 percent