European shares dip from seven-year highs, China rate cut lifts Asia

(Reuters) - European shares slipped from seven-year highs on Monday, weighed down by merger activity in the telecoms sector, while Asian stocks edged up after China cut interest rates at the weekend.

The dollar hit an 11-year high against a basket of currencies on growing prospects of a rise in U.S. interest rates from the U.S. Federal Reserve, before giving up the gains as economic data lifted the euro.

U.S. stocks looked to be headed for a steady open, according to index futures SPc1.

The pan-European FTSEurofirst 300 stocks index .FTEU3 edged up at the open but lost steam and was last down 0.4 percent.

French media group Vivendi (VIV.PA) said on Friday it had agreed to sell its remaining stake in the telecoms company Numericable-SFR (NUME.PA) to Altice (ATCE.AS), whose shares were up 6.5 percent.

But falls of 5 percent in Vivendi and 7 percent in Greek banks .FTATBNK pressured the market and outweighed any beneficial impact of broadly upbeat euro zone data.

German manufacturing activity expanded further in February as new orders rose, according to Markit's final purchasing managers' index (PMI) for the month. Italy's Markit/ADACI PMI showed the first expansion in activity for five months, but French activity slowed further in February.

However, the numbers buoyed up the euro, which reversed early losses to trade up 0.3 percent at $1.1288.

"This could well be coming from the data this morning, but any rebounds at this point will be quite limited," said Ian Stannard, head of European FX strategy with Morgan Stanley in London.

Against a basket of currencies, the dollar hit a peak not seen since September 2003 .DXY before retreating. It was last down 0.2 percent on the day. The dollar was up 0.2 percent at 119.72 yen.

China, which posted its slowest growth in decades in 2014, on Saturday cut its benchmark lending and deposit rates.

A survey on Monday showed China's HSBC/Markit PMI had climbed to 50.7 in February - its strongest since July - from 49.7 in January. An official survey released on Sunday showed the factory sector had contracted for a second straight month in February.

The rate cut helped push Australian shares .AXJO 0.5 percent higher as shares in resources companies, which have prospered on the back of Chinese demand, rose. The Shanghai Composite Index .SSEC closed up 0.8 percent

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