GLOBAL MARKETS-European shares dip from 7-year highs, China rate cut lifts Asia

* Europe shares dip off lows as Vivendi (Swiss: VIV.SW - news) weighs

* China rate cut helps lift Asian equities, gold

* U.S. stocks seen opening modestly higher

* Dollar dips from 11-year peak vs basket

By Nigel Stephenson

LONDON, March 2 (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.

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

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

But falls of 5 percent in Vivendi and 7 percent in Greek banks 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 (NasdaqGS: MRKT - news) '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 (Xetra: 885836 - news) in London.

Against a basket of currencies, the dollar hit a peak not seen since September 2003 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 0.5 percent higher as shares in resources companies, which have prospered on the back of Chinese demand, rose. The Shanghai Composite Index closed up 0.8 percent

The impact in the rest of Asia was muted. MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent. Tokyo's Nikkei closed up 0.2 percent as the yen lost ground against the dollar.

In euro zone government bond markets, Spanish, Italian and Portuguese yields fell to record lows, as investors looked forward to the start of the European Central Bank's quantitative easing programme later this month. ECB policymakers meet in Cyprus on Wednesday and Thursday.

ROUBLE WEAKER

Russia's rouble weakened to 62.2 to the dollar , as the oil price fell and after the murder of Boris Nemtsov, and prominent opposition leader and critic of the Kremlin.

Brent crude fell nearly 2 percent to $61.40 a barrel, due to dollar strength and a rise in Libyan oil output.

Expectations of demand from China lifted gold to a two-week high. Spot gold later eased to $1,216.40 an ounce. (Additional reporting by Atul Prakash and Patrick Graham in London, Shinichi Saoshiro in Tokyo, Lidia Kelly and Vladimir Abramov in Moscow; Editing by Kevin Liffey)