* FTSEurofirst 300 down 0.3 percent
* Risk fades after World Bank cuts global growth forecasts
* Banks dip ahead of JP Morgan, GS earnings
* Miners hit by macro risk, Anglo hurt by worker unrest
By David Brett
LONDON, Jan 16 (Reuters) - European shares drifted lower on Wednesday after caution over earnings and the global economic outlook saw indexes stall around multi-month highs.
By 1112 GMT, the FTSEurofirst 300 was down 3.18 points, or 0.3 percent, at 1,157.04, staying near 22-month highs but flatlining since hitting "overbought" territory just over a week ago.
The euro zone blue chip index has stalled around 18-month highs, with important data due out of China and U.S. earnings crimping gains in the short-term.
Risk appetite waned after the World Bank cut its global growth forecasts for 2013 in the wake of yesterday's disappointing German GDP numbers.
"Markets are looking somewhat stretched given the recent rally and we have turned more cautious in the short-term after weak economic data in Germany yesterday, ahead of Friday's Chinese GDP data and upcoming banking results in the U.S.," Securequity sales trader Jawaid Afsar said.
"Given the market were pushed higher by the financials we need them to regain their poise although at the present there is nothing to suggest that the rally is over. Numbers from the US earning too have created an air of nervousness."
Volumes remain week as investors decide where best to put their money to work on European stocks that have rallied 21 percent since June.
European banks, which have gained 45 percent in the same period, fell 1.4 percent on Wednesday as rising expectations ahead of U.S. corporate earnings from banking heavyweights Goldman Sachs and JPMorgan left the sector exposed to possible disappointment.
Confidence in the sector has grown after central banks stepped up support to prevent the financial system from collapsing, but gains have left the sector on a re-rated price-to-earnings (PE) of 16 times and in technically "overbought" territory.
Banks such as the UK's Lloyds, Royal Bank of Scotland and Switzerland's UBS now trade on near 40 percent premiums to their historical PEs, according to StarMine, leaving earnings scrambling to catch up.
Adding to concerns about over-optimistic expectations, Societe Generale shed 3.9 percent after CFO Bertrand Badre gave a cautious outlook message to analysts.
But Nomura reckons that while fourth-quarter results are likely to be lacklustre, investors moving their money between sectors could still be supportive.
"Like for much of 2012, we believe Basel 3 capital developments should be positive, and provided banks' earnings revisions remain less negative than the broader market ... sector rotation could continue to underpin valuations," it said in a note.
Macro risks dragged miners down 1.3 percent, with Anglo American losing 3.2 percent and tumbling from five-month highs due to worker unrest at its platinum mines, which analysts warn could hamper efforts to reverse losses there.
Auto-related firms fell after data showed European car sales plunged in December closing a year burdened by heavy declines in all major euro zone economies.
Telecoms dipped after Deutsche Bank warned that despite European phone companies underperforming the market by 19 percent in 2012, fourth-quarter results are unlikely to offer many reasons to be too optimistic.
The investment bank downgraded mobile telecoms firm Vodafone , which fell 1.8 percent, to "hold" from "buy" on concerns over deteriorating growth and cash returns.
Deutsche prefers Dutch telecom company KPN, which rose 2.4 percent, and Greek firm OTE, both of which the investment bank upgraded to "buy" from "hold".
Retailers were under pressure, particularly in the UK given HMV joined Jessops in administration this week.
Dixons Retail down 4.3 percent, continued to weaken ahead of its trading update tomorrow, with speculation rife among traders that a profit warning is on the cards.
The UK's no.1 retailer Tesco shed 1.2 percent with traders attributing its decline to negative sentiment on the stock after the supermarket retailer withdrew a number of beef burgers from sale after samples were found to contain horse DNA in tests.
Traditional safe haven assets such as Healthcare were the only major sector risers among European shares.