European shares retreat as profit warning hits Essentra

* Pan-European indexes down 0.7 percent

* Essentra plunges after profit warning

* Pullback in oil price hits commodities sector

* Financials down on low rates prospects (Recasts, adds details and updates prices)

By Kit Rees and Danilo Masoni

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

The pan-European STOXX 600 and FTSEurofirst 300 indexes were both down around 0.7 percent by 1109 GMT.

Among the biggest fallers on the STOXX 600, Essentra slumped over 30 percent after it warned of lower full-year profit, citing challenging market conditions in filter products and delays in some large projects.

A softening in the price of oil weighed on the shares of oil & gas companies. Traders took profits after three sessions of gains, though oil prices remain near to year-highs.

The oil & gas sector was down 1.4 percent, while analysts said that a weakening oil price was also weighing on sentiment among the basic resources stocks, which fell 1.3 percent.

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 expectations of a U.S 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 on Thursday.

Schupp said expectations that 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 0.4 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 was examining the possibility of hoarding billions of euros in vaults rather than paying a penalty charge for parking it with the ECB.

Commerzbank shares fell 1.4 percent.

Vodafone weighed on Telecoms stocks, falling 4 percent and making it the third biggest loser on the FTSEurofirst, after it traded without entitlement to its latest dividend payout.

Likewise German utility E.ON also fell after going ex-dividend.

Today’s European research round-up

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Mike Dolan, Markets Editor EMEA.