March 20, 2019 / 10:49 AM / 9 months ago

European stocks dip after 5-day rally; Bayer fall weighs on DAX

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* Bayer on track for worst day since Feb 2003

* Germany’s DAX falls more than 1 percent

* Britain’s Inmarsat up 17 percent after takeover offer

March 20 (Reuters) - European shares retreated from near six-month highs on Wednesday, with German stocks leading losses as chemicals producer Bayer headed for its biggest fall in 16 years following a U.S. court verdict on weed killer Roundup’s link to cancer.

With eyes fixed on a U.S. Federal Reserve statement and news conference later in the day, the pan-European STOXX 600 index fell 0.4 percent as investors booked profits after five sessions of gains.

Germany’s DAX lost more than 1 percent with Bayer down 12 percent after a San Francisco jury became the second to rule against Roundup, eight months after a $289 million award to claimants in a similar case. That award was later reduced to $78 million and is on appeal.

Bayer acquired Monsanto, the longtime maker of Roundup, for $63 billion last year.

“I’ve stayed well clear of Bayer since the Monsanto deal,” said one trader. “Bad deal, making the management look like they didn’t do their homework properly.”

Bayer shares were on track for their worst day since Feb 2003, erasing about 7.7 billion euro from its market value.

The Fed is expected to hold interest rates steady later on Wednesday and release long-awaited details of a plan to end the monthly reduction of its massive balance sheet. FRX/

Although unchanged rates have been priced in, investors will be watching to see if the Fed’s dot plot, the diagram which shows individual committee members’ rate views for the coming three years, aligns with the patient approach the U.S. central bank has expressed.

“An indicator of policymakers’ expectations of future interest rates - is likely to be relevant today, with markets expecting the Fed to not change borrowing costs on the day,” wrote Commerzbank Analyst Ulrich Leuchtmann in a note.

The basic resources sector led declines across Europe, closely followed by a pullback in car producers after the sector’s best day in more than three months on Tuesday.

Carmaker BMW fell 4 percent after the company said it expected group pretax profit to fall by more than 10 percent in 2019 and announced a sweeping 12 billion euros ($13.6 bln) cost savings and efficiency plan.

Also weighing on the DAX, typically sensitive to trade news, was a Bloomberg report about U.S. concerns that China is pushing back against American demands in trade talks.

The news comes ahead of next week’s talks between high-level officials from both countries, the first face-to-face meeting since President Donald Trump delayed a March 1 deadline on Chinese imports.

A weaker pound amid growing Brexit concerns and a selloff in blue-chip miners kept the exporter-heavy FTSE 100 mostly flat.

Home improvement retailer Kingfisher was one of the biggest drags on the index after it reported a 13 percent fall in annual profit and that Chief Executive Véronique Laury was leaving.

At the other end of spectrum was Inmarsat, up 17 percent after the British satellite operator said it was in talks about a $3.3 billion cash takeover approach from a private equity-led consortium. (Reporting by Agamoni Ghosh and Patrick Graham; Additional reporting by Helen Reid in London Editing by Keith Weir)

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