* FTSEurofirst 300 index closes 1.1 pct lower
* Utilities slip after results from some firms
* Banking shares down after forex probe fines
* Italy's FTSE MIB underperforms wider market
By Atul Prakash
LONDON, Nov 12 (Reuters) - European shares fell on Wednesday after two days of gains, with utilities stocks slipping after disappointing earnings and financials hit by global regulators' move to fine five banks for failings in currency trading.
The utilities index fell 2.4 percent, the biggest sectoral decliner, led by a 5.9 percent drop in Italy's Enel after it lowered its debt-reduction target for 2014 and reported a drop in nine-month core earnings.
Germany's top utility E.ON fell 3.4 percent after posting a steep drop in profits at its business in Russia, its most important foreign market.
Analysts said the market was likely to remain volatile in the near term due to choppy earnings results.
"If you look at 2015 earnings estimates for Europe, they are down quite sharply over the last few weeks. This shows that the underlying problems for the market are still very much intact," said Gerhard Schwarz, head of equity strategy at Baader Bank.
The FTSEurofirst 300 index of top European shares closed 1.1 percent lower at 1,343.41 points.
The European banking index slipped 2.1 percent after global regulators imposed penalties totalling $3.4 billion on UBS, Citigroup, HSBC, Royal Bank of Scotland and JP Morgan.
Barclays fell 2.2 percent. The British bank, a major player in the foreign exchange market, had been expected to be part of the settlement but Britain's Financial Services Authority (FCA) said its investigation was continuing.
HSBC was down 0.3 percent, while U.S. banks JPMorgan and Citi were down 1.4 percent and 0.8 percent respectively. UBS was little changed, with traders saying the fine had been already taken into account.
Italian bank UniCredit dropped 5.6 percent and peer Banco Popolare, which announced a net loss of 121.7 million euros for January-September late on Tuesday, slipped 4.2 percent.
Weaker Italian banks, on top of the sharp fall in utility company Enel, helped push Italy's benchmark FTSE MIB index down 2.9 percent.
The European retail index fell 1.2 percent, weighed down by a 1.1 percent drop in supermarket chain J. Sainsbury after it announced plans to cut spending deeply to help pay for lower prices.
On the positive side, oil services group SBM Offshore jumped 17.5 percent after it settled with Dutch prosecutors for $240 million over an inquiry into suspected improper payments to government officials. (Editing by Gareth Jones and Susan Fenton)