North Korea tension weighs on European shares but L'Oreal rallies

MILAN, Sept 22 (Reuters) - European shares fell in early deals on Friday on fresh tension on the North Korean front, while L'Oreal rallied in Paris on talk about possible ownership changes at the cosmetics giant.

L'Oreal rose more than 4 percent after billionaire Liliane Bettencourt, whose family founded the firm and still owns the largest stake in it, died.

Traders said her death could fuel talk that Nestle (Swiss: NESN.VX - news) could consider selling its stake in L'Oreal, which in turn may look at selling its holding in Sanofi (LSE: 0O59.L - news) .

The pan-European STOXX 600 index fell 0.2 percent by 0716 GMT. Miners were the biggest sectoral faller, down 1.4 percent, as escalating tensions on the Korean peninsula and China's rating downgrade hit metal prices.

North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after U.S. President Donald Trump vowed to destroy the reclusive country.

Among other regional benchmarks, Germany's DAX declined 0.1 percent, still close to 2-month high on the last day before an election that is expected to see Chancellor Angela Merkel emerge as winner. UK's FTSE fell 0.3 percent. (Reporting by Danilo Masoni, edited by Julien Ponthus)