Global stock markets had a mixed start to the week on Monday and core bond yields fell as investors juggled Chinese steps to stimulate its slowing economy and a proposed telecoms deal in Europe with growing worries Greece may default.

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."

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.