* FTSEurofirst 300 index down 1.1 percent
* Economic growth worries weigh on bank and commodity shares
* Defensives gain; pharma group Roche up 2.3 percent
By Peter Starck
FRANKFURT, July 6 (Reuters) - European shares fell for the third straight session on Monday on renewed worries about the sustainability of economic recovery foreseen in recent sentiment surveys on both sides of the Atlantic and in China.
Oil & gas stocks, banks and basic resources took the most points off the FTSEurofirst 300 index of top European shares, which fell 1.1 percent to 833.03 points -- its lowest close since May 13.
Those investors who stayed loyal to equities rotated positions into traditional safe havens such as pharmaceuticals, telecoms and food and beverages.
The benchmark index, which lost as much as 2 percent early in the European day before Wall Street opened after the long Independence Day weekend, is up 29 percent from the all-time low set on March 9.
That rally was driven primarily by an improvement in economic sentiment indicators.
"The market has priced in a lot. Now it remains to be seen whether things turn out that way," said Joerg Treptow, a trader at M.M. Warburg.
Among Europe's oil majors, ENI fell 2.7 percent, BP declined 2.6 percent and Royal Dutch Shell lost 2.1 percent as the crude price gave up more than 3.5 percent to trade below $65 a barrel.
Shares in miner Rio Tinto fell 7 percent and steelmaker ArcelorMittal dropped 4.7 percent. The DJ Stoxx basic resources index shed 5.2 percent.
Copper fell more than 3 percent to a two-week low as the dollar strengthened and investors fretted over how long it would take major economies to overcome recession, allowing demand to recover.
Among financials, ING Group tumbled 4.5 percent, Deutsche Bank fell 3.2 percent, AXA lost 3 percent, UniCredit closed 2.9 percent lower and Royal Bank of Scotland also was down 2.9 percent.
But reinsurer Paris Re surged 14.5 percent on news that Bermuda-based reinsurer PartnerRe would acquire it in a $2 billion deal.
Pharma group Roche gained 2.3 percent, in telecoms Vodafone added 1.7 percent, and in the food and beverages sector British American Tobacco rose 1.8 percent.
SINKING SENTIMENT
Investor and analyst sentiment in the euro zone worsened unexpectedly after showing three months of improvement, data from the Sentix research group showed.
The world's leading economies, should not presume a global economic recovery is near, World Bank President Robert Zoellick said.
Interventions by central banks and governments appeared to have "broken the fall in the global economy" by stabilising financial markets and boosting demand. "Yet 2009 remains a dangerous year. Recent gains could be reversed easily, and the pace of recovery in 2010 is far from certain," Zoellick said.
Strategists at Goldman Sachs saw attention shifting towards the durability of any economic growth recovery.
"The market's attention is likely to continue to shift away from the focus of the first half of the year -- is the global economy stabilizing -- towards what is likely to be the focus of the second half of the year -- how sustainable is any recovery likely to be?" Goldman Sachs said.
"Our focus is shifting away from the very intense scrutiny we have given to the major industrial and inventory indicators and towards the consumer and other measures of sustainable final demand," Goldman Sachs said.
Strategists at Morgan Stanley, who assessed that market consensus had tended to be consistently two months late this year, upgraded equities to "neutral" from "underweight".
"We are not turning outright bullish, as there are still plenty of uncertainties related to U.S. housing, European earnings, the European banking system, the default cycle, Chinese growth, and policy action," Morgan Stanley said.
"We would consider turning more positive if we get comfort that the trough in earnings and U.S. house prices is getting closer," Morgan Stanley said.
The U.S. quarterly corporate earnings reporting season kicks off this week with aluminium maker Alcoa on July 8.
"We believe second-quarter U.S. earnings will post a small positive surprise," JPMorgan said.
"In contrast to Q1, we do not see the financial sector driving the reporting season. Positive surprises are more likely to arise within cyclical sectors with consumer discretionary and technology our top picks," JPMorgan said.
"We look for a further 10-20 percent rally in equity markets as an increasing number of investors are induced into recovery trades or forced to cover defensive positions," it added. (Additional reporting by Brian Gorman and Atul Prakash in London; Editing by Dan Lalor)