By Sudip Kar-Gupta
LONDON (Reuters) - Germany's DAX hit a record high as European stocks rose on Monday, extending their recent sharp rally as investors bet that the weakened euro would boost the region's economy and lift exporter earnings.
The DAX -- which unlike many other European equity indexes factors in returns from dividends -- rose 1.2 percent to break through the 12,000-point level for the first time.
The pan-European FTSEurofirst 300 index rose 0.7 percent to 1,589.57 points, its highest since late 2007.
The DAX and other European stock markets have been lifted by the European Central Bank's launch of a trillion euro money-printing scheme aimed at boosting economic growth in Europe.
The quantitative easing programme has weakened the euro and pushed bond yields to new historic lows, driving investors to seek the better returns available from the stock market.
Although the single currency recovered slightly on Monday, it has still lost about 25 percent of its value against the U.S dollar since May last year.
"As the steroid injection of ECB QE continues to swell the DAX, as well as the other euro zone indices, investors remain enthralled with the region and seem committed to continuing its upswing," said Spreadex financial analyst Connor Campbell.
SIEMENS SURGES
Siemens was one of the top performers on the DAX, rising 1.6 percent to its highest level in around seven years after the German engineer won some Egyptian contracts.
Italian airport and highway caterer Autogrill and motorway operator Atlantia also hit record highs on expectations of higher passenger traffic after the announcement of a special Catholic church Holy Year.
Shares in Lafarge (PARIS:LAFP) fell 4.2 percent and Holcim dipped 1.3 percent, however, as the two cement majors argued over the terms of their planned merger.
Irish construction rival CRH (LONDON:CRH) -- which has agreed to buy assets from Lafarge and Holcim as they try to win regulatory approval for their planned merger -- also fell 3 percent.
Many investors were looking towards the U.S. Federal Reserve's two-day meeting beginning on Tuesday.
After successive months of strong jobs data, expectations have been growing that the Fed will point towards a June rate rise. Those expectations have strengthened the U.S. dollar, causing some investors to fret about the potential impact on U.S. corporate earnings compared with those in Europe.
"While the lower euro helps boost European stocks, it really is the strong dollar that has been sending U.S. shares lower. We could soon see analysts starting to forecast negative U.S. earnings growth for 2015," said Mirabaud Securities' senior equity sales trader John Plassard.