European shares weaken as Bayer and commodity stocks fall

* Bayer falls on scrutiny of Xarelto drug

* DuPont/Dow Chemical merger talks lift Syngenta and BASF

By Sudip Kar-Gupta

LONDON, Dec 9 European shares fell on Wednesday to their lowest level in far more than two months, weighed down by a drop at pharmaceuticals group Bayer and far more pressure on commodity stocks.

The pan-European FTSEurofirst 300 index fell .3 % to its lowest level considering that late October, although the euro zone’s blue-chip Euro STOXX 50 index also slipped by .two percent.

Bayer shares fell by three.four percent as European and U.S. drug safety agencies probed whether or not a defective blood-clotting test device impacted a trial involving Bayer’s anti-blood clotting drug Xarelto.

Oil rates climbed back up on Wednesday as U.S. crude inventories dipped, whilst Japan posted rising machinery orders and copper costs also held their ground.

Nonetheless, a lot of investors were cautious, citing persistent concerns about a slowdown in China and uncertainty more than the impact of a most likely U.S. interest rate hike in December.

China is the world’s most significant consumer of metals, and fears about a slowdown in the country have knocked back commodity stocks this year.

Data on Wednesday showed that China’s customer inflation picked up slightly in November but remained well beneath the government’s 2015 price target of 3 percent, raising concerns that the world’s second-largest economy could be sucked into a Japan-style deflationary trap.

“I am taking a much more defensive attitude now, and I have reduce equities to neutral from overweight,” mentioned Francois Savary, chief investment officer at investment management firm Prime Partners.

Ashtead was the very best-performing stock on the European STOXX 600 index, climbing eight.2 % following the industrial equipment employ group raised its profit expectations.

Syngenta and BASF shares also rose on the back of merger talks between rivals Dow Chemical and DuPont.

In spite of the pullback so far this week, European stock markets remain in positive territory because the start off of 2015, helped by financial stimulus measures from the European Central Bank (ECB).

The FTSEurofirst is up around five % since the begin of 2015, although Germany’s DAX is up practically 10 %.

Today’s European investigation round-up (Editing by Estelle Shirbon)