Tech stocks drag European shares from multi-year highs

(Updates prices, adds analyst comment and detail)

* Tech stocks fall, tracking weakness in U.S. peers

* FTSEurofirst 300 hovers below 7-1/2 year high

* Steel producers rally after EU says to impose duties

* Rebound in euro weighs on DAX

By Sudip Kar-Gupta

LONDON, March 25 (Reuters) - European shares retreated further from 7-1/2-year highs hit last week, led lower by technology stocks that were hit by a sell-off in their U.S. peers.

The STOXX Europe 600 Technology Index fell 2.9 percent, with traders citing concerns over weak computer sales as weighing on the U.S technology sector.

British chipmaker ARM fell 6.1 percent while Dutch semiconductor company ASML declined 5.5 percent.

Germany's DAX equity index, which hit a record of 12,219.05 points last week, also fell 1.2 percent to 11,865.32 points.

Data on Wednesday showed German business morale rose for the fifth month in a row in March, hitting its highest level since July 2014, while French business morale stood at its highest in nearly three years in March.

On Tuesday, figures showed Germany's private sector grew in March at its strongest rate since July.

However, the strong German data has contributed to a rebound in the euro, which has impacted the DAX as a weaker euro helps German exporters.

"A strong euro is generally bad for the DAX and it's giving investors an opportunity to take some profits," said Hantec Markets' analyst Richard Perry.

"But I don't think this will change the longer-term picture for the DAX, which should continue to perform well going forward," added Perry.

The pan-European FTSEurofirst 300 fell 1.1 percent to 1,586.96 points, below 7-1/2 year highs reached last week.

European food stocks also remained in negative territory despite Heinz's plan to buy a majority stake in Kraft Foods.

The FTSEurofirst has soared 16 percent this year, helped by the European Central Bank's decision to buy government bonds to inject more liquidity into markets and boost economic growth.

"NEGLIGIBLE CORRECTION"

"Today is a negligible correction and we should soon see the bull pressures re-energised," said Mike Turner, European equity options broker at XBZ Limited.

Accor (Paris: FR0000120404 - news) fell 4.3 percent after Eurazeo (LSE: 0HZC.L - news) and Colony Capital sold a near 10-percent stake in the hotel group.

But shares in steel companies Acerinox (Madrid: ACX.MC - news) , Outokumpu and Aperam (LSE: 0OLF.L - news) rose after the European Union announced punitive anti-dumping duties on stainless steel cold-rolled sheet from China and Taiwan.

Shares (Berlin: DI6.BE - news) in oil and gas industry pipes maker Vallourec also rose 5.3 percent on speculation of a tie-up with another company. A Vallourec (LSE: 0NR2.L - news) spokeswoman declined to comment.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Additional reporting by Alexandre Boksenbaum-Granier, Blaise Robinson (LSE: RBN.L - news) and Alistair Smout; Editing by Gareth Jones)