GLOBAL MARKETS-European shares up after China stimulus fails to lift Asia

* European shares rise on telecoms sector bid

* Wall St expected to open higher

* Euro down on Greece worries

* Asia shares fall as China stimulus fails to lift mood

By Nigel Stephenson

LONDON, April 20 (Reuters) - European stocks rose on Monday, shrugging off falls in Asia after gains driven by Chinese stimulus measures faded, while the euro fell against the dollar on worries Greece may default.

Wall Street shares, which fell steeply on Friday, looked set to open higher, according to index futures .

A hefty cut on Sunday in the amount of cash Chinese banks must keep in reserves initially lifted shares in China and Japan but both gave up the gains to end lower as investors focused on new Chinese stock trading regulations unveiled last week.

Oil prices, boosted by the Chinese stimulus, turned lower by midday in Europe after Saudi Arabia's Oil Minister Ali al-Naimi said Saudi production would stay near record highs in April.

The pan-European FTSEurofirst 300 stocks index was up 0.8 percent at 1,620 points, boosted by a 1.3 billion euro bid by Telenet (Other OTC: TLGHY - news) for Dutch KPN's mobile telephony unit in Belgium. A fillip for mining stocks from the Chinese measures also helped.

Telenet, a subsidiary of cable company Liberty Global (NasdaqGS: LBTYA - news) , rose 6.67 percent while KPN (Amsterdam: KPN.AS - news) gained 2.3 percent.

"It seems pretty good for both," said Michael Bishop, an analyst at RBC Capital Markets. "A slightly higher price for KPN than had been speculated and slightly better synergies compared to market expectations for Telenet."

MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan fell 1.2 percent while Tokyo's Nikkei lost 0.1 percent.

Chinese shares erased gains as fears of a regulatory crackdown offset the central bank measures. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1.6 percent.

The euro fell 0.6 percent to $1.0737 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 afloat and in the single currency.

The dollar was up 0.5 percent against a basket of other major currencies.

"We see the dollar moving towards parity with the euro in the third quarter, but if something happens around Greece, it may come sooner," said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi UFJ in London.

Earlier the Chinese reserve requirement ratio cut lifted the Australian and New Zealand dollars. China is the main export market for both Australia and New Zealand.

GREECE

Worries over Greece kept German government bond yields under pressure. Ten-year yields, the benchmark for euro zone borrowing costs, edged lower to 0.08 percent, having fallen as low as 0.05 percent on Friday.

Many in the market expect German 10-year yields to fall below zero.

"The momentum of the decline in yields in the last week points technically and psychologically to an impending attack on the zero percent level by the 10-year Bund yield," said Norbert Wuthe, senior analyst at Bayersiche Landesbank.

Brent crude gave up China-inspired gains and dropped nearly 2 percent to just above $62 a barrel, having hit a four-month high of $64.95 last week. It last traded at $62.21 a barrel.

Gold dipped below $1,200 an ounce as the dollar steadied. (Additional reporting by Francesco Canepa and Patrick Graham in London and Lisa Twaronite in Tokyo; editing by John Stonestreet/Crispian Balmer)