European shares weighed down by financials; profit warning hits Essentra

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details) Adds details, updates prices)

* Pan-European indexes down 1 percent

* Financials hit by low rates prospects

* Essentra (Other OTC: FLRAF - news) plunges after profit warning

By Danilo Masoni

MILAN, June 9 (Reuters) - European shares fell for a second straight day on Thursday weighed down by continued weakness among financial sector stocks, while Essentra plunged after a profit warning.

The pan-European STOXX 600 and FTSEurofirst 300 indexes were both down around 1 percent by 0846 GMT.

Despite this, shares in DONG Energy jumped as much as 10 percent after the Danish utility and wind farm developer sealed the biggest European stock market flotation this year.

Some investors cited the recent strength of the euro as a negative factor for European equities as well as caution ahead of a UK vote later this month on whether to remain in the European Union.

"The weaker dollar is overall bad for European companies and ... the Brexit vote means there will be a lot of uncertainties in the mid term," said Jerome Schupp, head of research at SYZ Asset Management in Geneva.

Fading expectation of a U.S (Other OTC: UBGXF - news) rate hike triggered by a weaker than expected jobs report last Friday have sent the dollar to a five-week low against a basket of currencies this week. The euro has also strengthened but was down slightly on Thursday.

Schupp said expectations the Federal Reserve would not lift interest rates any time soon had weighed on financial stocks, especially the big European banks with a global business.

The STOXX 600 Bank sector index, which has been the worst sectoral performer so far this year, was down 1 percent, with Deutsche Bank (LSE: 0H7D.L - news) , BNP Paribas (LSE: 0HB5.L - news) and Barclays (LSE: BARC.L - news) down 1.2-1.5 percent.

Profitability in the sector is being hurt by the European Central Bank's ultra low interest rates, a policy which has been criticised by German politicians including Finance Minister Wolfgang Schaeuble.

On Wednesday, sources told Reuters that Commerzbank (LSE: 21170377.L - news) was examining the possibility of hoarding billions of euros in vaults rather than paying a penalty charge for parking it with the ECB.

Commerzbank (Xetra: CBK100 - news) shares fell 2 percent.

Vodafone fell 4.5 percent, making it the second biggest loser on the FTSEurofirst, after it traded without entitlement to its latest dividend payout.

Among the biggest fallers on the STOXX 600, Essentra fell 27 percent after it warned of lower full-year profit, citing challenging market conditions in filter products and delays in some large projects.

Today's European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA.

(Reporting by Danilo Masoni; Editing by Mark Potter)