* FTSEurofirst down 0.4 percent
* Miners retreat as Japan cuts forecasts
* Kingfisher slides after BofA ML double downgrade
By David Brett
LONDON, Aug 28 (Reuters) - Europe’s top shares lost ground on Tuesday as economic growth concerns kept investors subdued and reluctant to trade while waiting to learn more about further stimulus from central banks.
By 1012 GMT, the FTSEurofirst was down 4.23 points, or 0.4 percent, at 1,091.75, erasing the previous session’s gains but keeping within its recent 30 point trading range.
Volumes were very low at just 18 percent of their 90-day daily average.
The Eurostoxx 50, the euro zone index of blue chip companies, was 0.3 percent lower as the index ricocheted between 2,400 and 2,495.
“Investors are betting on support from central banks. The markets are not misleading and the central banks will react. The current pull back we are experiencing is the market pricing in the step-by-step approach by policymakers,” said Victor Peiro Perez, head of strategy at Caja Madrid Bolsa.
In the short term Perez recommended strengthening positions in defensive sectors such as utilities but sees banks and miners regaining momentum in the last quarter as central banks unveil stimulus packages.
Growth-focused stocks were the top fallers early on in Europe with miners the worst-performing sector after Japan cut its forecast for the economy, citing slowdowns in the United States and China as well as Europe’s debt crisis.
The recent two-month rally has seen sectors such as miners re-rate to double digit price-to-earnings ratios, well above March highs, which JP Morgan said might only be sustainable if policymakers assuage markets and take action in September.
The bank kept its “underweight” rating in cyclical sub-sectors such as miners, steelmakers and capital saying it remains concerned over the ability of growth to show any sustainable pickup.
Spain’s economy contracted further in the second quarter of the year and with no end in sight to the euro zone debt crisis companies continue to reduce their exposure to the region.
French bank Credit Agricole rose 0.6 percent as it said a deal to sell its troubled Greek arm could be wrapped up within weeks. Costs stemming from the euro zone’s most depressed economy again hammered the French bank’s quarterly results.
Kingfisher’s exposure to waning growth in France prompted BofA Merrill Lynch to cut its rating on Europe’s biggest home improvements retailer to “underperform” from “buy”, citing increasing worries over the country’s macro outlook.
Kingfisher fell 4.3 percent.
UK-listed retailer Marks & Spencer was 1.9 percent weaker as recent bid speculation faded.
“(M&A) is a story which crops up from time to time. While one should ‘never say never’, we suspect it will come to nothing,” Seymour Pierce said in a note.
Many investors were on the sidelines ahead of meetings that could pave the way for more economic stimulus.
Friday’s global gathering of central bankers in Jackson Hole, Wyoming, will be closely watched, as will the ECB’s policy meeting on Sept. 6 and a German Constitutional Court ruling on the euro zone’s permanent bailout fund on Sept. 12, which may offer direction on the ECB’s bond-buying plans.
“It is so quiet,” a London-based trader said. “No one wants to take on any risk in case policymaker surprise and they get caught on the wrong side of a big market move.”