European shares drop as mining stocks weaken, airlines fall

* FTSEurofirst index falls 0.8 pct

* Mining shares drop as metals prices fall

* Airlines down as Egyptair plane goes missing

* Thomas Cook (Xetra: A0MR3W - news) slumps after poor update

By Atul Prakash

LONDON, May 19 (Reuters) - European stocks retreated on Thursday as weaker oil and metals prices put pressure on commodities shares and concern mounted that U.S (Other OTC: UBGXF - news) . interest rates would be raised soon.

Travel and leisure stocks fell after an Egyptair flight carrying 66 passengers and crew disappeared on a flight from Paris to Cairo .

Shares (Berlin: DI6.BE - news) in British holiday company Thomas Cook slumped nearly 17 percent, reaching their lowest since March 2013, after it said tourists were avoiding Turkey, its second-most popular destination last year.

The pan-European FTSEurofirst 300 index was down 0.8 percent, erasing the previous session's gains. The basic resources sub-index fell 3.3 percent and the energy sub-index dropped 1.8 percent drop.

"The relief rally that started in February seems to be over now. We are in a difficult situation as we need growth and higher profits, but an improvement in the economy raises the risk of a U.S. rate hike sooner rather than later," said Koen De Leus, a senior economist at KBC, in Brussels.

"We had a huge rally in commodities stocks also, but investors are hesitant to chase the sector as concerns about the pace of economic growth in China persist."

Sentiment soured as minutes of the Federal Reserve's meeting in April suggested the central bank might raise rates at its meeting next month.

Meanwhile, oil prices fell after data showed U.S. stockpiles of crude rose and Iranian exports to Europe and Asia surged . A stronger dollar pushed down prices of major industrial metals such as copper and aluminium .

Shares in Anglo American (LSE: AAL.L - news) , BHP Billiton (NYSE: BBL - news) and Glencore (Xetra: A1JAGV - news) dropped 4.1 to 4.7 percent.

Airline stocks fell after the EgyptAir flight disappeared from radar screens somewhere over the Mediterranean Sea, Egypt's national airline said. Officials at EgyptAir and the Egyptian civil aviation authority told Reuters they believed the Airbus A320 probably crashed into the sea.

Shares in Airbus, Air France KLM, Lufthansa, British Airways' owner International Consolidated Airlines Group and Aeroports De Paris (Other OTC: AEOXF - news) were down 0.5 to 1.5 percent.

Accor (EUREX: 485822.EX - news) , TUI (LSE: 0NLA.L - news) and InterContinental Hotels (Other OTC: ICHGF - news) fell 1.3 to 2.5 percent. The STOXX Europe 600 Travel and Leisure index was down nearly 1 percent.

Banks advanced. The Stoxx Europe 600 Banks index rose 1.7 percent, helped by a 2.2 to 2.9 percent rise in Standard Chartered (HKSE: 2888.HK - news) , Barclays (LSE: BARC.L - news) and Royal Bank of Scotland.

Today's European research round-up

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Mike Dolan, Markets Editor EMEA. (Editing by Larry King)