* FTSEurofirst 300 slips, but Greek shares rise
* Athens market up on new Greek govt reforms
* Fiat falls on emission concerns
* Bayer down after making Monsanto offer (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). Adds details, share prices)
By Sudip Kar-Gupta
LONDON, May 23 (Reuters) - The Greek bourse outperformed weaker European stock markets on Monday, after Athens agreed a series of reforms that should pave the way for an agreement on bailout loans and debt relief talks.
The broader, pan-European FTSEurofirst 300 index was down 0.6 percent, while the pan-European STOXX 600 index also fell 0.5 percent, impacted by drops in Fiat Chrysler and Bayer.
However, Athens’ benchmark ATG equity index climbed 1.2 percent.
The Athens stock market rose after Greek lawmakers approved tax increases and a new privatisation fund on Sunday and freed up the sale of non-performing loans in exchange for much-needed bailout loans and debt relief.
The move also led to Greek government borrowing costs dropping to a six-month low on Monday.
“The unlocking of more emergency loans for Greece has given some reassurance to investors concerning the country,” said Naeem Aslam, chief market analyst at TF Global Markets UK Ltd.
Fiat Chrysler fell 3.7 percent after German newspaper Bild am Sonntag said the carmaker could be prohibited from selling cars in Germany if evidence of continued disregard of emissions rules is found.
A Fiat Chrysler spokesman declined to comment on the report but said all the carmaker’s vehicles are compliant with existing emissions regulations.
Bayer also dropped 3.2 percent after the German drugs and chemicals group made an offer to buy U.S. seeds company Monsanto for $62 billion in a deal that would be financed in debt and equity.
“The very large equity portion of the deal is likely sustaining the negative investor sentiment. Further, we expect Monsanto to reject the offer initially as such protracting the uncertainty around Bayer shares,” Helvea said in a note.
Among tech stocks, Aixtron soared 16 percent after China’s Fujian Grand Chip Investment Fund agreed to make a bid for the German semiconductor equipment maker.
Deutsche Bank’s equity strategists struck a downbeat note on prospects for the European stock market, arguing that headwinds from possible U.S. interest rate rises and a slowdown in China would impact the market.
“We see no further upside for European equities for the rest of this year,” Deutsche Bank wrote in a note, cutting its end-2016 target on the STOXX 600 to 325 points from 380 points - marking a fall of 3.4 percent from current levels.
Today’s European research round-up
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Mike Dolan, Markets Editor EMEA. (additional reporting by Danilo Masoni in Milan; editing by Susan Thomas)