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 per cent by 0846 GMT.
Despite this, shares in DONG Energy jumped as much as 10 per cent 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.
Dollar at 5-week low
Fading expectation of a USrate 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 per cent, with Deutsche Bank, BNP Paribas and Barclays down 1.2-1.5 per cent.
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 2 per cent.
Vodafone fell 4.5 per cent, 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 per cent after it warned of lower full-year profit, citing challenging market conditions in filter products and delays in some large projects.