Bayer, earnings updates help European shares hit 4-month high

(Corrects first and fifth paragraph to reflect that Bayer (Swiss: BAYN-EUR.SW - news) (not BASF) rose and was the biggest boost to the STOXX after an asset disposal (not acquisition); Corrects BASF share price move in fifth paragraph)

MILAN, Oct (Shenzhen: 000069.SZ - news) 13 (Reuters) - European shares rose to their highest level in nearly four months in early deals on Friday, helped by some well-received earnings updates and gains in Bayer after a $7 billion asset sale.

The pan-European STOXX 600 rose 0.2 percent by 0724 GMT and was set for its fifth straight week of gains as inflows into the region's equities continued with confidence over its economic recovery offseting a fresh focus on political risk.

Germany's DAX index was flat, just below the fresh all-time high hit in the previous session, while Britain's FTSE eased back 0.4 percent after a record close on Thursday.

According to EPFR Global data European equity funds posted solid weekly inflows overall, but Spanish equity funds suffered their second largest outflow on record and redemptions from Italy climbed to levels last seen in the second quarter of 2015.

Bayer (IOB: 0P6S.IL - news) was the biggest single stock boost to the STOXX, up 1.5 percent after BASF, the world's third-largest maker of crop chemicals, agreed to buy significant parts of its seed and herbicide businesses for 5.9 billion euros ($7 billion) in cash. BASF fell 0.7 percent.

Among top gainers on the STOXX were Provident Financial (Other OTC: FPLPF - news) , up 10 percent, after the British subprime lender put in place a recovery plan for its home credit business which it said was set to post a 2017 loss of up to 120 million pounds.

A well-received earnings update also boosted shares in Man (Swiss: MAN.SW - news) Group, up 3.9 percent. The British hedge fund said assets rose 7.9 percent in the third quarter, boosted by market gains and net inflows to its funds.

(Reporting by Danilo Masoni, Editing by Helen Reid)