* Earnings, valuations concerns dominate in Europe
* Shares in top listed Portuguese bank BES fall 15 pct
* Dollar steadies after overnight fall
* China's trade data not as strong as expected, reaction limited
By Patrick Graham
LONDON, July 10 (Reuters) - Europe's debt-sodden periphery was back at the top of the list of financial concerns on Thursday, troubles around Portugal's biggest listed bank pushing shares sharply lower and quelling demand for an issue of bonds by Greece.
The noise around BES, whose shares plunged more than 15 percent, drowned out any support for sentiment from Federal Reserve minutes read as showing the U.S. central bank little closer to an outright rise in interest rates.
Stock markets in Germany and France fell around 1.5 percent while Norway's, also hurt by poor results for its own biggest commercial lender, was down more than 2 percent.
Yields on bonds issued by the southern European governments at the heart of four years of turmoil for the euro zone rose across the board and traders said demand for an issue of three-year Greek bonds was lacklustre in response.
"It is not ideal timing given all the concerns the market has on Portugal," said Michael Michaelides, a rates analyst at RBS in London.
"We've seen a very strong sale in Ireland. The broader correlation still stands in the periphery but now you see increasingly that when there is a particular story in one country, that market moves a lot more than the others."
Also playing in to the concerns around the euro zone's southern half were data showing the steepest drop in Italian industrial output in almost two years.
U.S. stock futures pointed to a fall of almost one percent at opening.
STRETCHED
Faith in a rally in stock markets that dates back to August 2011 has been more shaky over the past month than for some time, as the Fed nears what looks like a definitive end to its programme of new money-printing.
But the minutes from the U.S. central bank's last meeting, published after European markets had closed on Wednesday, offered no sign it was any closer to following that with a swift rise in official interest rates to cool the economy.
That boosted U.S. and Asian markets overnight. But the dominant concern in Europe was companies' results and the economy's ability to survive without the new funds which the Fed's bond-buying has forced into the system every month.
Norway's largest bank DNB added to an inauspicious start to the second quarter earnings for some of Europe's biggest companies while construction firm Skanska said it would significantly scale down its loss-making Latin American operations.