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 European shares opened higher, shrugging off falls in Asia after
early gains there, driven by a hefty cut in the amount of cash
Chinese banks must hold in reserves, faded.
Sunday's 100 basis point cut by the Chinese central bank in the
reserve requirement ratio helped lift the Australian dollar against
its U.S. counterpart. China is the main export market for Australian
natural resources.
The Chinese stimulus helped lift oil prices, which were also boosted
data on Friday showing the number of U.S. rigs drilling for crude
fell to its lowest since 2010.
This, in turn, contributed to an early rise in European shares, led
higher by telecoms after a 1.3 billion euro bid by Telenet <TNET.BR>
for Dutch KPN's <KPN.AS> mobile telephony unit in Belgium.
The pan-European FTSEurofirst 300 <.FTEU3> stocks index was up 0.7
percent at 1,620 points. Telenet, a subsidiary of cable company
Liberty Global <LBTYA.O> rose 6 percent at one point and was last up
4.5 percent. KPN gained 2.2 percent.
 "It seems pretty good for both," Michael Bishop, an analyst at RBC
Capital Markets, said. "A slightly higher price for KPN than had
been speculated and slightly better synergies compared to market
expectations for Telenet."
Earlier, Asian shares ended the day lower. MSCI's broadest index of
Asia-Pacific shares outside Japan <.MIAPJ0000PUS> fell 0.9 percent
while Tokyo's Nikkei <.N225> lost 0.1 percent.
Chinese shares erased gains as fears of a regulatory crackdown
offset the central bank measures. The CSI300 index <.CSI300> of the
largest listed companies in Shanghai and Shenzhen fell 1.6 percent.
The Chinese stimulus measures pushed the Australian dollar to a
one-month high of $0.7844. It was last up 0.5 percent at $0.7809.
"It's been the typical kneejerk reaction to additional stimulus in
China," said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi
UFJ in London.
"That should just be temporary. So far the stimulus has had
relatively little impact in terms of preventing the slowdown in
China. We think there is more pressure on the Aussie to come."
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The euro was down 0.3 percent at $1.0779, having risen as far as
$1.0849 on Friday, after IMF and G20 meetings in Washington
generated no progress in Greece's prospects of doing a deal on
financial aid that would keep it in the single currency.
COLLATERAL
France's central bank chief said Greek banks may soon run out of
collateral to access European Central Bank refinancing unless Athens
reaches an agreement with the European Union and International
Monetary Fund on economic reforms.
Worries over Greece pushed German government bond yields lower.
Ten-year yields, the benchmark for euro zone borrowing costs, were
last 1.2 basis points lower at 0.07 percent, having fallen to 0.05
percent on Friday.
Many in the market expect German 10-year yields to fall below zero.
Brent crude <LCOc1> was up some 30 cents at $63.79 a barrel, not far
off last week's four-month high of $64.95. The day's gains were
pared after Oil Minister Ali al-Naimi said Saudi production would
stay near record highs in April.
Gold held above $1,200 an ounce, supported by the weaker dollar.
(Additional reporting by Francesco Canepa and Patrick Graham in
London and Lisa Twaronite in Tokyo; editing by John Stonestreet)
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